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THE UNITED STATES 
OF EUROPE 


Paul Hutchinson 





/ 

THE UNITED STATES 
OF EUROPE 

by 

PAUL HUTCHINSON 


WILLETT, CLARK & COLBY 

Chicago: 440 South Dearborn Street 
New York: 200 Fifth Avenue 
1929 



Copyright 1929 by 
WILLETT, CLARK & COLBY 


Through courtesy of 

CHRISTIAN SCIENCE PUBLISHING SOCIETY 


Manufactured in The U. S. A. by The Plimpton Press 
Norwood, Mass. : LaPorte, Ind. 


.W* V 




©CIA 


17166 





To 

William Allen White 




















M. BRIAND’S PLEA 
for the Formation of a 
United States of Europe 

This has been called a generous idea. Perhaps 
those who so termed it did so in order not to be 
obliged to term it imprudent. It has been in the 
minds of philosophers and poets for generations 
and now seems to have gained a firmer grip on 
the minds of people as a whole, owing to the fact 
that it is seemingly a necessity. In these circum¬ 
stances certain propagandists come forward in 
order to canvass the idea further; I confess myself 
among them. I am not unaware, of course, of 
the difficulties inherent in such a course or the 
arguments which may be leveled against it. 

It might have been said that it was not for 
responsible statesmen to launch out on this kind 
of adventure, but I reflect that on the whole 
even a wise statesman is entitled to have a grain 
of folly in his make-up, and I have accordingly 
advocated this idea. I have advocated it, as it 
were, in the background. I realize that it is a 
little outside the scope of the League, although it 


The United States of Europe 


seems it is in connection with the League. I do 
realize that it is to a certain extent outside the 
purview of the League, and if it were constituted, 
it would necessarily be constituted under the 
League. 

If this should come about, it has been said 
that it would be purely economic in character. 
I entirely disagree with that suggestion because it 
has about it something of the smack of war, and 
for my part I do not think we ought to have any 
system which would have the appearance of 
putting up one party against any other party; 
but I do think that where you have a group of 
peoples, grouped together geographically in 
Europe, there ought to be some federal link be¬ 
tween them. They must have means among 
themselves of discussing any problems which are 
of general interest and of establishing the general 
solidarity of Europe in order that they may know 
where they stand if really serious differences 
arise. 

It is this connecting link which I desire to 
establish, and obviously the most important com¬ 
ponent of this connecting link will be economic 
agreement, and I believe that in the economic 



M. Briand’s Plea 


sphere agreement can be reached. But also there 
should be a political and social link, which, of 
course, would in no way affect the sovereignty 
of the parties involved. 

I shall therefore take this opportunity of 
asking the various representatives of European 
states at this Assembly whether they will not 
unofficially consider and study this question in 
order that at the next Assembly we may be in a 
position possibly to translate it into reality. 

—From a speech delivered before the 
Tenth Assembly of the League of Nations , 
meeting at Geneva , Switzerland , 
j September , 7929 



















CONTENTS 


M. Briand’s Plea for the For¬ 
mation of a United States of 
Europe 

Preface i 

I. The Birth of the United States of 

Europe 5 

1. A Dream That May Come True 

2. The Clairvoyance of M. Briand 

3. Support for M. Briand 

4. The Prophet of Pan-Europe 

5. World Power or Downfall 

6. The Response to Coudenhove-Kalergi 

II. Tariff Walls and Economic Power 24 

1. Europe’s Struggle for Food 

2. International Economic Warfare 

3. Why Tariff Barriers Rose 

4. The Revolt Against Tariff Barriers 

5. The Voice of the International Banker 

6. The World Economic Conference of 1927 

7. Why Europe’s Tariffs Stay High 

8. Poverty and Progress 



Contents 


III. Europe’s Recovery from the War 46 

1. Ten Years After Versailles 

2. The Comeback in Coal Production 

3. Imports and Exports 

4. The Recovery of France 

5. Economic Problems That Remain 

IV. The Cartels Point the Way 64 

1. Where Pan-Europe Already Exists 

2. Marshalling Europe’s Resources 

3. The Coming of the International Cartels 

4. Expansion of the Cartels 

5. Life in the Cartels 

6. Cartels—Pro and Con 

V. Rationalization’s Logical Con¬ 
clusion 82 

1. What Is Rationalization? 

2. Rationalizing German Coal 

3. What Happens to the Workers? 

4. Reorganizing the Steel Trust 

5. German and British Chemical Strategy 

6. Rationalization Crosses Europe 

7. How America Has Helped 

8. What Rationalization Proves 

VI. The Outlook for Europe’s 

Workers 106 

1. The Masses and Pan-Europe 

2 . British Labor and the Future 



Contents 


3. What Can French Labor Expect? 

4. Italy and the Syndicalists 

5. Germany’s Struggling Masses 

6. Workers in the New States 

7. What Can the Workers Expect? 

VII. The American Influence 138 

1. Where the Idea Comes From 

2. The American Threat 

3. Is Europe’s Back to the Wall? 

4. The American Example 

5. American Free Trade 

6. Is Pan-Europe Anti-American? 

VIII. Problems for the U. S. E. to 

Solve 155 

1. The Heritage of Versailles 

2. Unsettled Boundaries 

3. Minorities 

4. Security and Armaments 

5. Europe’s Burden of Taxation 

IX. England, Russia and the U. S. E. 175 

1. Will Britain and Russia Join? 

2. Britain’s Industrial Crisis 

3. Unemployment in England 

4. Why Britain Holds Off 

5. Russia and Pan-Europe 

6. War Against Europe 



Contents 


X. Obstacles to be Surmounted 191 

1. Europe’s Prevalent Skepticism 

2. A Thousand Years of History 

3. Tasting a New Freedom 

4. Maintaining Economic Independence 

5. Italy and Pan-Europe 

6. Where the AmericanlAnalogy Breaks Down 

XI. How Will the United States of 

Europe Be Formed? 205 

1. Going Ahead Despite Difficulties 

2. First Moves Toward a Plan 

3. Instead of a Zollverein 

4. A Possible European Conference 

5. The Birth of a U. S. E. 

6 . Most Favored Nations 

7. How Would America Respond? 

XII. In Conclusion 221 


PREFACE 


The movement for the establishment of a 
United States of Europe is a fact that must be 
reckoned with in the present European situation. 
But it is such a recent fact that few Americans 
have grasped its significance, especially for the 
future. It is the purpose of this book to describe 
the situation out of which this movement has 
arisen, and the factors which have made its 
appearance inevitable. 

Within the next few years the proposal to erect 
a United States of Europe will become of world¬ 
wide interest. But it is important to bring this 
report immediately to the American public with¬ 
out waiting for discussion to grow general in other 
countries because the development of the project is 
bound ultimately to affect American politics and 
even more American industry. The American 
business man, the American farmer, the American 
mechanic may one day be called on to mark his 
ballot in accordance with his attitude toward 
the formation of a United States of Europe. If 
that should come to pass, an early introduction 




The United States of Europe 


to the subject will help toward a calm under¬ 
standing before the passions of partisanship make 
objective consideration impossible. 

A trip through Europe in the summer of 1929 
provided the material for the present study. 
In the course of this trip scores of leaders of 
European opinion were interviewed. In a small 
group, led by Sherwood Eddy, it was possible 
to gather the views of such men as S. K. Ratcliffe, 
H. D. Henderson, H. N. Brailsford, Viscount 
Cecil, Norman Angell, David Lloyd George, 
Arthur Henderson, Arthur Greenwood, Hugh 
Dalton, Seebohm Rowntree, Philip Kerr, Alfred 
Duff-Cooper and G. P. Gooch in Great Britain; 
Paul Scott Mowrer, Andre Siegfried, Pierre de 
Lanux, Francis Delaisi and Professor Gaston 
Jeze in France; John Maynard Keynes, M. J. 
Bonn, Salvadore Madariaga, and Gilbert Murray 
in Geneva; Dr. Hjalmar Schacht, Geheimrat 
Kindi, Dr. Walter Simons, Professor Einstein, 
Geheimrat Kuenzer, Professor Hoetzsch, Direktor 
Carl Mennicke and Professor Palyi in Germany, 
together with a considerable number of the 
leaders of soviet Russia. 

At other times, carrying credentials from the 
— 2 — 



Preface 


Christian Science Monitor and from the periodi¬ 
cal with which I am connected, the Christian 
Century, there were visits to the centers of 
Britain’s industrial difficulties, and some study of 
economic conditions in Poland, Czechoslovakia 
and Austria. This was followed by a period of 
research at Geneva, in which the resources of the 
League of Nations, the International Labor 
Office, and the International Management In¬ 
stitute were placed at my disposal. While I 
cannot attempt to name all the persons who sup¬ 
plied me with material during the weeks while I 
was in Geneva, my especial thanks are due Sir 
Arthur Salter, director of the economic and 
financial section of the League of Nations; Miss 
A. C. Bartlett, associate librarian of the League, 
and Mr. H. C. Kerr, British representative on 
the staff of the International Management In¬ 
stitute. 

Because of his kindness in giving me permis¬ 
sion to quote from his illuminating book, “The 
New Industrial Revolution,” and because of the 
light which, in personal conversation, he threw 
on the economic conditions which at present 
characterize European life, my thanks are also 
— 3 



The United States of Europe 


due to Mr. Walter Meakin, economic expert of the 
London Daily News. 

By far the largest part of the material con¬ 
tained in this book was written in Geneva, and 
published as a series of articles in the Christian 
Science Monitor. My thanks are due to the 
Christian Science Publishing Society for their 
generous permission to incorporate this material 
in this volume. 

As I hope this study makes clear, there are 
enormous difficulties in the way of realizing the 
ideal which lies behind the slogan, “A United 
States of Europe. 55 How those difficulties are to 
be overcome does not yet appear. I believe, 
however, that they will be overcome. There is 
still plenty of vitality in Europe. Her leaders— 
whether political or industrial or in the ranks 
of labor—recognize that a new day, bringing new 
necessities, confronts that continent. Under the 
compulsion of these new necessities it is reasonable 
to believe that they will ultimately find a way of 
transcending the divisions which now condemn 
millions to poverty and the fear of future war, 
and of bringing to pass the formation of a Pan- 
European federation of states. 

Chicago, 15 October 1929. 

— 4 — 


P. H. 



CHAPTER I 


THE BIRTH OF THE 
UNITED STATES OF EUROPE 

i. A Dream That May Come True 

Is there to be a United States of Europe? Had 
you asked the question five years ago, the an¬ 
swer, whether affirmative or negative, would have 
treated the idea as largely academic. Talk about 
the possibility of a United States of Europe was 
then on much the same plane as talk about the 
possibility of the earth growing too cold to sus¬ 
tain life, or about the possibility of an airplane 
non-stop flight around the globe. The event 
might come to pass. Indeed, there were reasons 
for believing that it would come to pass. But it 
was hardly a pressing concern for this genera¬ 
tion. 

Today, all that is changed. Discussion of the 
formation of a United States of Europe is no 
longer regarded as a mere playing with an at¬ 
tractive, but fanciful, idea. There is no more 
earnestly discussed and practically considered 
proposal now occupying the European mind. 
— 5 — 


The United States of Europe 


The political and economic air of Europe seems 
all at once to have become saturated with the 
phrase. During the months just past, investiga¬ 
tion in both western and eastern Europe has 
shown that leaders of public opinion everywhere 
regard the proposal as one that will have to be 
dealt with in the immediate future. They may 
favor it; they may oppose it; at least, they all 
talk about it. And the talk, whether pro or con, 
is universally respectful. The day has passed 
when responsible European leaders are ready to 
dismiss the whole idea with a smile and a shrug. 
The possible formation of a European federation 
of some sort is the livest issue in the life of the 
continent today. 


2. The Clairvoyance of M. Briand 

Perhaps the universal attention now being 
given to the proposal for a United States of 
Europe is due, in large measure, to the advocacy 
of the idea by M. Briand. When, in July 1929, 
M. Briand gave an interview to the press in which 
he spoke of himself as a champion of the idea of 
European federation, and intimated that he 
— 6 — 



The Birth of the U. S. E. 


would support the calling of a European economic 
conference in the fall to take the first steps toward 
bringing such a federation into being, he un¬ 
doubtedly gave the proposal an immediate im¬ 
portance far beyond that it had held in the past. 
For M. Briand is probably the most powerful 
single figure in the political life of the continent, 
and any idea that he advocates is bound to re¬ 
ceive careful consideration all over Europe. 

But that is not the only reason why M. 
Briand’s championship has marked a milestone 
in the progress of the Pan-European idea. The 
French prime minister has a reputation for keep¬ 
ing his ear close to the ground and for an uncanny 
prescience in foretelling the course of public 
opinion. European politicians have a way of 
speaking of Briand’s “clairvoyance.” When he 
sends his trial balloons aloft he generally is pretty 
sure that there is a favorable wind waiting to 
catch them and waft them to the desired port. 
He has just given Europe an amazing illustration 
of his ability to do this by the way in which he 
picked the outlawry of war idea out of the air, as it 
were, made it his own, and then pushed it forward 
to the general ratification of the Pact of Paris. 

— 7 — 



The United States of Europe 


Four years ago M. Briand sensed, to the hour, 
the arrival of the peoples of Europe at enough of 
an appeasement of the war bitterness to make a 
new program of cooperation possible. Out of 
his perception came the Locarno treaties. Year 
before last he sensed, to the hour, the arrival of 
the peoples of the world at a point where they 
were ready to place war outside the pale of inter¬ 
national law, and to lay down a new basis for 
international relations. Out of that perception 
came the Briand-Kellogg pact. Now, even though 
prime minister of one of the most nationalistic 
countries in Europe, he stands before the As¬ 
sembly of the League of Nations and proclaims 
the necessity for a “federal link” to bind the 
nations of Europe together. He announces it as 
his policy to lead in the forging of this “connect¬ 
ing link.” The words were carefully chosen. 
They have immense importance. Naturally, the 
politicians of Europe, faced by such a daring pro¬ 
posal coming from such a source, are asking 
themselves, “Has Briand again caught the first 
rising of a flood tide? Will it carry him on to 
another, and even greater, triumph?” 


— 8 — 



The Birth of the U. S. E. 


3. Support for M. Briand 

Nor does M. Briand stand alone, even now 
while the discussion of the United States of Europe 
idea is comparatively new. At least two of his 
predecessors in the French premiership, M. Pain- 
leve and M. Herriot, have committed themselves 
to the idea. In Germany, the late Dr. Strese- 
mann had begun to speak in its advocacy. In 
Belgium, where the high industrial development 
makes government especially sensitive to eco¬ 
nomic dislocations, the powerful foreign minister, 
M. Hymans, is so much in favor of a federation 
that he declares that, if a full Pan-European 
union is at present impossible, then let some 
smaller group of European states, whose interests 
are plainly similar, get together. Even the British, 
although they recognize the gulf between their 
historic free trade policy and the plan of a Pan- 
European customs union, express their sympa¬ 
thetic interest in the idea, and their intention to 
support it, by cooperation if not by membership. 

Of course, the idea for a union of the warring 
states of Europe is not a new one. It dates at 
least as far back as the political writings of Im- 


— 9 — 



The United States of Europe 


manuel Kant, and it has been advocated, with 
more or less vigor, by an unbroken line of intel¬ 
lectuals stretching from the great German phil¬ 
osopher down to H. G. Wells. It is of interest, in 
view of the present French preoccupation with 
the idea, to remember that Victor Hugo probably 
gave the suggestion of a coming European feder¬ 
ation the clearest expression which it received 
during the last century. Thus, Lord Ronald 
Gower, in his autobiography, “My Reminis¬ 
cences,” speaks of visiting Hugo and the painter, 
Gustave Dore, on February i, 1879, and reports 
Hugo’s conversation in this fashion: 

“According to Hugo, Europe in the twentieth 
century will form one great republic, like the 
United States, of which, of course, France will be 
the center and the governing power; and Paris, 
of course, the capital. No more wars will then 
be possible; and men will wonder as they look 
back at the obsolete instruments of destruction 
in the museums what these infernal machines 
were meant for; and marvel how it was possible 
that armies could have met each other for the 
purpose of mutual slaughter at the bidding of 
those exploded institutions, monarchies. The 
—10 — 



The Birth of the U. S. E. 


race of great captains is at an end; nor does 
Victor Hugo or the Almighty intend that any 
more great soldiers should exist. The late war 
was a proof of this! That was indeed but a war 
of machines and engineering. France is all the 
better for that war; a war which has enriched 
her and ruined the Germans. C L 5 argent que nous 
leur avons donne,’ said Hugo, has only impover¬ 
ished them and made us rich. The English, he 
thinks, will be the last of the European nations 
to conform to the republican confederation, but 
sooner or later they will have to do so.” 

Discussion of this sort, as was said at the 
beginning, has been largely academic in tone. 
It has treated the union of European peoples as 
a utopian dream, considered by most practical 
people a little too good to come true. But to the 
credit of Europe’s intellectuals it needs to be 
said that there has never been a time, even when 
the nationalistic divisions of the continent were 
strongest, when some thinkers of importance were 
not holding aloft the ideal of a union that should 
transcend and absorb all differences. 

In recent years, however, the movement for a 
unification of Europe has passed out of the hands 
— ii — 



The United States of Europe 


of the intellectuals and has become part of the 
program of some of the most astute statesmen 
and industrialists of the continent. A feeling 
of desperation at the political and economic 
problems which have grown out of the war has 
hastened this development. With the treaty of 
Versailles ten years old, and with post-war 
Europe covered with a network of commercial 
and political agreements that are supposed to 
hasten the solution of difficulties bequeathed by 
the war, it is everywhere recognized that some 
of the fundamental problems are drifting away 
from rather than toward solution. Such are the 
problems of tariffs, of minorities, of disputed 
boundaries, of surplus populations. And as the 
perception of the difficulty of these problems has 
grown, there has grown with it the belief that 
they are beyond the solution of single states. If 
they are to be solved at all, it must be by the 
states acting as a unit. This is the basis on which 
rests the present movement to establish a United 
States of Europe. 


—12 — 



The Birth of the U. S. E. 


4. The Prophet of Pan-Europe 

If one seeks a single man to name as the 
prophet of the movement in its present form, one is 
bound to recount the work of one of the most 
romantic figures in Europe, Count Richard N. 
Coudenhove-Kalergi. When the influence which 
this single man has already exerted is considered, 
it does not seem fantastic to believe that the Pan- 
European Union which he preaches may be estab¬ 
lished in this generation. It is only six years 
since he wrote the book, “Pan-Europe,” which 
gave the idea and the phrase, “a United States 
of Europe,” to the continent. Yet in these six 
years, by ceaseless agitation and organization, 
Count Coudenhove-Kalergi has made his ideas 
a part of the practical considerations of every 
government in Europe. For a modern parallel 
to his achievement one can think only of the 
influence of the American lawyer, S. O. Levinson, 
on the movement for the international outlawry 
of war. 

Count Coudenhove-Kalergi brought a strange 
heritage to his study of European problems. 
Born in 1894, he is the son of one of the most 
— 13 — 



The United States of Europe 


distinguished diplomats and linguists of the 
Austria of that day. The principal interest of his 
father’s life was in the abolition of racial antagon¬ 
ism, particularly as between Jews and Christians. 
The count’s mother, however, was a Japanese, 
and it may be that this Oriental inheritance has 
played its part in increasing the breadth of his 
international outlook. 

Taking his doctorate in the University of 
Vienna at an exceptionally early age, Count 
Coudenhove-Kalergi later became a professor 
in that famous institution. His classes were 
crowded. But the problems of post-war read¬ 
justment—problems which lay so heavily on 
Austria—more and more engaged his attention 
until, in 1923, he published his book, “Pan- 
Europe.” Many books are called epochal, but 
few deserve that adjective. Yet it is doubtful 
whether any book published in Europe since the 
war has had such immediate and far-reaching 
results. 

In his book Count Coudenhove-Kalergi said: 
“The cause of Europe’s decline is political, not 
biological. Europe is not dying of old age, but 
because its inhabitants are killing and destroying 
— 14 — 



The Birth of the U. S. E. 


one another with the instruments of modern 
science. As regards quality, Europe is still the 
most productive human reservoir in the world. 
The aspiring Americans are Europeans trans¬ 
planted into another political environment. The 
peoples of Europe are not senile; it is only their 
political system that is senile. So soon as the 
latter has been radically changed, the complete 
recovery of the ailing continent can and must 
ensue.” 

The question of Europe’s future, as he saw it 
in those dark pre-Locarno days of 1923, was: 
“Can Europe, so long as its political and economic 
disunion lasts, maintain its peace and independ¬ 
ence with respect to the growing World Powers; 
or is it bound, in order to preserve its existence, 
to organize itself into a federal union?” The book 
declared for a federal union, calling for the forma¬ 
tion of a Pan-European movement which should 
stand for “self-help through the consolidation of 
Europe into an ad hoc politico-economic federa¬ 
tion.” 


— 15 — 



The United States of Europe 


5. World Power or Downfall 

Count Coudenhove-Kalergi’s interpretation 
of the world political situation following the war 
aroused almost as much interest in Europe as his 
advocacy of a Pan-European Union. The period 
before the war, he held, had been a period 
of Great European Powers, building colonial 
empires, and holding world sway from their 
European capitals. But beginning with the 
Spanish-American and Russo-Japanese wars, and 
culminating with the World war, this period 
had passed. The world was no longer to be ruled 
by a number of Great European Powers, but by a 
small group of true World Powers. Four of these 
are already in existence: Britain, with its inter¬ 
continental commonwealth; Russia, with its 
Eurasian socialist union; Japan, with its Asi¬ 
atic empire and dominance, and the United 
States. 

If the states of Europe, Count Coudenhove- 
Kalergi declared, hoped to continue to play a 
world role on a level with these four new World 
Powers, they could do so only by sinking their dif¬ 
ferences and combining in a single fifth World 
— 16 — 



The Birth of the U. S. E. 


Power of their own. For, of the Great European 
Powers that had entered the war, Austria- 
Hungary had been shattered; Germany reduced 
to a minor role; France and Italy “have gained 
territorially through the war, but they have suf¬ 
fered such losses in men and money that their 
position in world politics now rests upon insecure 
foundations. Their influence outside of Europe, 
the Mediterranean, and Asia is very slight. They 
are European Great Powers of the first, but 
World Powers of the second rank.” 

The four true World Powers already in being 
Count Coudenhove-Kalergi spoke of as being in 
fact Leagues of Peoples. Thus, the Russian union 
includes within its borders Great Russians and 
White Russians, Ukrainians and eastern Turks, 
Georgians and Circassians, Tartars and Armeni¬ 
ans. The British commonwealth includes Anglo- 
Saxons and Irish, French Canadians and Boers, 
Arabs and Indians, Egyptians and Malays, and 
almost half a hundred other nationalitites. Pan- 
America contains Anglo-Saxons, Spaniards, Por¬ 
tuguese, Negroes, Indians and half-breeds. And 
the Mongolian power, although not yet so clearly 
defined, holds within itself northern and southern 
— 17 — 



The United States of Europe 


Chinese, Tibetans, Mongolians, Manchus, Turko¬ 
mans, and still others. 

All these represent different national groups 
that are moving toward each other. In Europe, 
in contrast, the tendency is toward new separa¬ 
tions. Scandanavia has recently split into three 
parts. Austria-Hungary, western Russia, and 
European Turkey have disintegrated into a mul¬ 
titude of jealous states. Today Germany and 
Jugo-Slavia threaten further dissolution. Such a 
tendency is suicidal. Its tragedy is the more ap¬ 
parent in view of the fact that, by combining, these 
same states, which are now dooming themselves to 
future subordination in world affairs, might form 
a fifth World Power approximately equal in size, 
population and resources to any of the other four. 

In support of his assertion Count Coudenhove- 
Kalergi presented calculations showing that, by 
uniting the 27 states and four territories of Europe 
into a single union (exclusive of Great Britain and 
Russia) a federation would result containing 
5,000,000 square kilometers of territory and 300,- 
000,000 inhabitants. If to this were added the 
colonies in West Africa and the scattered posses¬ 
sions of Holland, France, Portugal, Italy and 
— 18 — 



The Birth of the U. S. E. 


Denmark, the total area of Pan-Europe would be 
24,704,000 square kilometers and the total popu¬ 
lation 429,000,000. Such a World Power would 
stand on equal terms with a British common¬ 
wealth containing 36,000,000 square kilometers 
of territory and 454,000,000 inhabitants, with a 
Russian union of 22,000,000 square kilometers 
and 145,000,000 inhabitants, with a Mongolian 
empire containing 12,000,000 square kilometers 
and 408,000,000 inhabitants, or with a Pan- 
America of 30,000,000 square kilometers and 
212,000,000 inhabitants. 

In other words, the Pan-European Union 
which Count Coudenhove-Kalergi envisaged 
would stand third in area and second in popula¬ 
tion among the five World Powers. And while 
this piling up of its resources required a certain 
amount of arbitrary treatment—as in the assump¬ 
tion that the colonial appendages of the states in 
the proposed Pan-European Union would re¬ 
main as they are at present, and that there would 
be no change in the territories controlled by the 
other powers—it was at least clear enough and 
striking enough to arrest the attention of every 
European statesman. 

— 19 — 



The United States of Europe 


6. The Response to Coudenhove-Kalergi 

Having published his book, this 29-year old 
Austrian awoke to find himself famous all over 
the continent, and looked to to provide active 
leadership in the movement for which he had 
called. Prophets do not always make good 
leaders. In this case, however, the writer quickly 
proved himself a born organizer. He threw him¬ 
self into the cause with enormous energy, writing 
to all parts of Europe, stirring up interest, and 
then rushing about to put the final organizing 
touches on local, autonomous branches of the 
Pan-European Union which everywhere sprang 
into being. A magazine was started, “Pan- 
europa,” which is now in its fifth volume. Some 
idea of the extent of the activities of the organi¬ 
zation can be obtained from the fact that a single 
number of this monthly, chosen at random, con¬ 
tains reports of meetings, banquets, conferences, 
and similar gatherings held during the previous 
month in Germany, England, France, Lettland, 
Austria, Switzerland, Spain, Czechoslovakia and 
Hungary. Count Coudenhove-Kalergi is the 
principal figure in many of these gatherings. In 
— 20 — 



The Birth of the U. S. E. 


addition to his speaking, his organizing duties, 
and his editing—he acts as editor of “Paneuropa” 
—he has found time in some manner to write or 
edit seven more books since the appearance of 
his “Pan-Europe.” 

Of course, no such response would have been 
given Count Coudenhove-Kalergi’s challenge had 
not the minds of hundreds of Europeans already 
been working along the same lines. In the year 
after “Pan-Europe” appeared, Edouard Herriot, 
then prime minister of France, endorsed the idea 
in an address delivered before the Sorbonne. 
Herr Stresemann immediately commented favor¬ 
ably in Germany. Apparently this emboldened 
Herriot, for in January, 1925, speaking in the 
Chamber of Deputies, he said: “It is my greatest 
wish to see the day come when the United States 
of Europe will become a reality.” And the state¬ 
ment was wildly applauded. 

It is impossible to list all the European leaders 
who have since committed themselves, at least in 
principle, to the idea. But without trying to 
make the enumeration complete, one can name 
off-hand, among the French, Briand, Loucheur, 
Painleve, Jouvenel, Caillaux, Thomas, Boncour, 
— 21 — 



The United States of Europe 


Leger and Delaisi; among the Germans, Strese- 
mann, Schacht, Simons, Marx, Loebe, Koch, and 
Wirth; among the Austrians, Mgr. Seipel, Alfred 
Adler, Deutsch, Bronislav Huberman; among the 
Belgians, Hymans and Vendervelde; among the 
Czechs, Masaryk and Benes; among the Italians, 
Sforza and Nitti. The activities of such men 
range from the occasional speeches of political 
leaders like Briand and Stresemann to the inten¬ 
sive propagandist activities of a man like Prof. 
Otto Deutsch, who is reported in a recent issue 
of “Paneuropa” to have held meetings explaining 
the Pan-Europe idea during the previous month in 
Riga, Reval, Dorpat, Helsingfors, Posen, Warsaw 
and Danzig. 

It seems as though the idea of a federated 
Europe, when it takes hold of some people, can 
impel them to a zeal which has in it all the ele¬ 
ments of sacrifice and consecration that distin¬ 
guish a religious crusade. Perhaps the most 
striking illustration of this has been in the case of 
Bronislav Huberman, the violinist, who has prac¬ 
tically abandoned his appearances on the concert 
stage in order to go about Europe preaching the 
gospel of federation. 

— 22 — 



The Birth of the U. S. E. 


It is doubtful, however, whether the move¬ 
ment would have become as powerful as it is in 
this short time had it not been for support—per¬ 
haps it would be nearer the facts to say but for 
pressure—from the industrialists of Europe. 
Europe’s political difficulties are mountainous, 
and it is not surprising that her statesmen are 
turning to the idea of united action as a means 
of solving them. But, when all is said and done, 
it is her industrial future that most concerns the 
average European. The fundamental problems 
of the people of Europe are the problems of bread 
and clothes and housing. And these problems, 
in an increasingly competitive world, are further 
from solution than the political problems. One 
cannot understand the strength of the proposal 
for a United States of Europe unless one knows 
the economic aspect of that movement. It is 
with that aspect that subsequent chapters in this 
book must principally deal. 


— 23 — 



CHAPTER II 


TARIFF WALLS AND ECONOMIC POWER 

i. Europe’s Struggle for Food 

It is the political leader—a Briand or a 
Stresemann, a Benes or a Seipel—who has, by 
his advocacy, given the proposal for a United 
States of Europe importance in the eyes of the 
world. But it is the industrialist and the banker, 
the men concerned for Europe’s economic future, 
who stand behind the scenes and give vigor to the 
movement. It is more of a guarantee of France’s 
genuine and permanent support to find that 
Louis Loucheur, her greatest captain of industry, 
is president of the Pan-European Union of France 
than to find any number of premiers and former 
premiers listed on the committee. It means 
more in Germany to have Dr. Schacht, of the 
Reichsbank, behind the movement than to be 
able to announce a chancellor’s adherence. 

As a matter of fact, it is the immediate eco¬ 
nomic gain to be secured from some sort of com¬ 
ing together of the divided states of Europe that 
— 24 — 


Tariff Walls and Economic Power 


most recommends the whole idea to the politi¬ 
cians of the continent. Once an economic feder¬ 
ation has been formed, the politicians hope that 
the movement will then develop in such a way as 
to solve some of their political troubles—the 
problem of the minorities, for instance. But that 
is something for the future. Right now, the 
political leaders proclaim their interest in a 
United States of Europe because they hope, in 
forming such a body, to drive away the specter 
of poverty, either present or to come, which now 
haunts the waking and sleeping hours of most of 
the common people of central and eastern 
Europe. 

If the United States of Europe is formed in 
this generation, it will not be because a Cou- 
denhove-Kalergi, or a Briand, or anyone else 
dreamed glamorous dreams of world power. It 
will be because men in the masses, toiling men 
and those who direct their toil, became frightened 
lest food should fail and shelter be denied them. 
The argument for a United States of Europe 
which carries weight—and the only argument 
which carries weight—is that of bread and butter. 
If it were not for the bread and butter argument, 

— 25 — 



The United States of Europe 


it is safe to say that there are enough animosities 
of one kind and another scattered about the 
European landscape to make the mere thought of 
any sort of coming together ridiculous. But when 
it is a matter of continuing to eat—ah, that’s an¬ 
other story. 


2 . International Economic Warfare 

To the thinking European there is nothing 
more clear than the growing intensity of the 
economic struggle that lies ahead for his state. 
Whether he is a citizen of a highly industrialized 
state like Belgium, or of a state with large capital 
resources like France, or of a state that must build 
its economic life almost from the foundations like 
Poland, he knows that an exhausting conflict 
will fill the future. He knows that the pros¬ 
perity of his country depends, in large degree, 
on its ability to supply markets outside its own 
borders, for none of the European states—with 
the exception of Russia—can provide an internal 
market large enough to keep a modern industrial¬ 
ized state prosperous. He may feel that his 
country is well equipped, from the standpoint of 
— 26 — 


Tariff Walls and Economic Power 


raw materials or manufacturing establishments, 
or both, to enter this race for outside markets. 
But then he looks up to see that neighboring 
nations, that almost all the other states in Europe, 
are similarly equipped. All of them are ready to 
fight for their share of foreign markets. And as he 
sees their readiness for economic battle, his hope 
sinks. 

But that is only the beginning of his despair. 
He can foresee the exhaustion that is bound to 
result from his struggle with his next-door neigh¬ 
bor. Then he raises his eyes a trifle higher, so 
that he can look across the Atlantic. There he 
sees an industrial colossus. Colossal wealth, 
colossal resources in raw materials, colossal man¬ 
ufacturing plants, colossal technical and engineer¬ 
ing skill. He discovers that this colossus is just 
beginning to think that he, too, needs his share of 
the world markets in order to maintain for his 
people the unprecedented standard of living 
which they believe is theirs by right of residence 
in a colossal land. Is it any wonder that the 
European industrialist feels that, if he is to have 
any chance at all in the coming struggle, he must 
find a way of combining what strength he has with 
— 27 — 



The United States of Europe 


the strength of all his European neighbors, so 
that, lumped together, the aggregate resources 
which they can take to the coming battle for 
world markets will not be hopelessly less than 
those of the colossus across the ocean? 


3. Why Tariff Barriers Rose 

The war did many things to Europe. One of 
the items that enters into Europe’s present eco¬ 
nomic difficulties is the fact that it enormously in¬ 
creased the number of factories. When the states 
of Europe found themselves at war, their military 
necessities forced them to provide in a few months 
manufacturing plants that might normally never 
have been built. In the case of France this ex¬ 
pansion was the greater because the wave of 
German invasion quickly swallowed a large part 
of the country that was most important in her 
economic program. 

But it was not only the warring states that in¬ 
creased their number of factories. With the decla¬ 
ration of war, the neutral states found themselves 
cut off from many of their customary sources of 
supply. Naturally, they set about providing for 
— 28 — 



Tariff Walls and Economic Power 


their own needs, wherever that was possible, and 
thus still another new flock of manufacturing 
plants came into existence. And when peace 
came these new plants, both in the warring and 
in the neutral countries, were left, looking for 
markets to maintain themselves. 

While the war covered Europe with new man¬ 
ufacturing plants, the peace brought a large 
number of new states. The breaking-up of the 
old Austro-Hungarian empire and the creation of 
the new states in what had once been western 
Russia gave Europe more than three thousand 
miles of new boundaries. It also subjected the 
continent to the rivalries, quarrels, and at times 
almost open warfare of a multitude of new states 
which found the wine of an unaccustomed liberty- 
pretty strong for their heads, but which were 
determined to establish their own position at 
whatever cost to their neighbors. 

The result has been that all these new states 
have adopted the policy of high protection for 
their infant industries. They have set out to 
become free—that is, self-sufficient—economic 
units, just as the peace made them free political 
units. To give such plants as they possessed a 
— 29 — 



The United States of Europe 


guaranteed market, and to encourage the build¬ 
ing of other plants for the production of goods 
previously imported from outside their new 
boundaries, they built their tariff walls high 
enough to keep all intruders out. That, as they 
read it, was the lesson taught by the prosperity of 
the United States, France, and pre-war Germany. 

Even the older states felt it necessary to boost 
their tariff walls. With an excess of manufac¬ 
turing plants on their hands, how else could they 
provide these plants with something to do? And 
if the plants were closed, how could they provide 
for the workers thus thrust into the ranks of the 
unemployed? The obvious thing to do, as most 
individual manufacturers saw it, was to provide 
such tariff protection in each nation that every 
industrial plant could be practically assured a 
free field in its home market. 

At this point it is well to call attention to one 
fact in connection with the tariff barrier problem 
which is frequently overlooked in current discus¬ 
sion. So large a factor has American competition 
become in the European economic outlook—as 
will be pointed out at length in another chapter— 
that there is a disposition to blame America for 
— 30 — 


Tariff Walls and Economic Power 


being at the bottom of all Europe’s industrial 
difficulties. If it were not for the American high 
tariff policy and for American insistence on shar¬ 
ing in the profits under “most favored nation” 
clauses in commercial treaties, the argument is 
apt to run, Europe could reduce her tariffs in a 
hurry. 

This is mainly nonsense. It was not the 
threat of American competition that reared 
Europe’s tariff barriers in the first place; it was 
the fear of competition from next door neigh¬ 
bors. It would not be American competition that 
would be most stimulated by a reduction of tariff 
barriers between European states; it would be 
competition between the industrialists of Europe 
itself. Granting the influence which America has 
on the whole question, it is taking altogether too 
much for granted to talk as though a solution of 
the problem of American competition is all that 
is needed to bring Europe’s internal tariff walls 
down. This issue is still far more inter-European 
than international. 

Thus it happened that Europe, during the 
first half-dozen years after the armistice, turned 
itself into a economic battlefield, with 27 separate 
— 3 ! — 



The United States of Europe 


states dividing themselves off into 27 different 
customs units, all of the units surrounded with 
almost unscalable tariff barriers, inside which 
every one of the 27 units scrambled desperately, 
trying to make itself self-sufficient and self- 
supporting. 

4. The Revolt Against Tariff Barriers 

Of course, it couldn’t be done. Clear-headed 
economists knew that from the first, and said so. 
Europe paid no attention to them. But soon the 
futility of the effort began to appear to the bankers 
and the men connected with the basic industries— 
the railways, the coal mines, the steel mills, and 
the like. They saw that the policy of cooping 
business up within the boundaries of any Euro¬ 
pean state was, in the long run, a policy of suffo¬ 
cation. They saw that the tariff barriers would 
eventually do more harm to the prosperity of the 
people they were supposed to protect than to the 
outside interests from which they were supposed 
to be protected. They saw, in other words, that 
the whole theory of an economic warfare between 
27 mutually exclusive units was a huge delusion 
— 32 — 



Tariff Walls and Economic Power 


that could lead only to the exhaustion and pov¬ 
erty of all. 

It was the dawning recognition of the folly of 
this unending European tariff war that brought 
into being such an organization as the Inter¬ 
national Chamber of Commerce. The president- 
founder of that body, M. Etienne Clementel, in 
first summarizing its purposes, said that it was 
formed “to see just where the principal industries, 
commerce and agriculture stand; to condemn all 
restrictions, all the barriers which hamper trans¬ 
portation and commercial exchanges; to seek 
effective means of insuring commercial liberty; 
to inquire into the utility of international in¬ 
dustrial ententes. 55 

When Sir Alan G. Anderson became acting 
president of the same body, in 1926, he put the 
case even more forcibly. “Europe is sick of 
£ malaise economique, 5 55 he said, “not because her 
climate or her people or her material assets have 
failed, but because she is haunted by ghosts of the 
dead hatreds of war. A false idea has poisoned her 
mind, and through her mind poisoned her body. 
In war, the man across the frontier is an enemy to 
be killed but in peace, the man with whom one 
— 33 — 



The United States of Europe 


buys and sells is a partner much more than a rival, 
and the prosperity of one partner helps another 
even if they live on opposite sides of a frontier. 55 


5. The Voice of the International Banker 

It took, however, the famous International 
Bankers 5 Manifesto, published in October, 1926, 
to bring the economic folly of the European situ¬ 
ation clearly into view. 

“It is difficult to view without dismay, 55 said 
that historic document, “the extent to which 
tariff barriers, special licenses and prohibitions 
since the war have been allowed to interfere with 
international trade and to prevent it from flow¬ 
ing in its natural channels. At no period in 
recent history has freedom from such restrictions 
been more needed to enable traders to adapt 
themselves to new and different conditions. 55 

Then, after sketching more fully what had 
been going on, the manifesto continued: “There 
can be no recovery in Europe until politicians in 
all territories, old and new, realize that trade is 
not war but a process of exchange, that in time of 
peace our neighbors are our customers, and that 
— 34 — 



Tariff Walls and Economic Power 


their prosperity is a condition of our own well¬ 
being. . . . Dependent as we all are upon im¬ 
ports and exports, and upon the processes of 
international exchange, we cannot view without 
grave concern a policy which means the impover¬ 
ishment of Europe. 

“Happily there are signs that opinion in all 
countries is awaking at last to the dangers ahead. 
The League of Nations and the International 
Chamber of Commerce have been laboring to 
reduce to a minimum all formalities, prohibitions 
and restrictions, to remove inequalities of treat¬ 
ment in other matters than transfers, to facilitate 
the transport of passengers and goods. In some 
countries powerful voices are pleading for the 
suspension of tariffs altogether. Others have sug¬ 
gested the conclusion of long periods of commer¬ 
cial agreements embodying in every case the 
most-favored-nation clause. Some states have 
recognized in recent treaties the necessity of 
freeing trade from the restrictions which depress 
it. And experience is slowly teaching others that 
the breaking down of the economic barriers be¬ 
tween them may prove the surest remedy for the 
stagnation which exists. 

— 35 — 



The United States of Europe 


“On the valuable political results which might 
flow from such a policy, from the substitution of 
good will for ill will, of cooperation for exclusive¬ 
ness, we will not dwell. But we wish to place on 
record our conviction that the establishment of 
economic freedom is the best hope of restoring 
the commerce and the credit of the world.” 

All the world took notice of this manifesto. 
Naturally, for to it were signed the names of the 
leading bankers of Austria, Belgium, Czecho¬ 
slovakia, Denmark, France, Germany, Great 
Britain, Holland, Hungary, Italy, Norway, Po¬ 
land, Rumania, Sweden, Switzerland, and the 
United States of America. Yes, even of the 
United States of America! For the economic 
crisis produced by Europe’s system of endless 
tariff barriers had become so acute that six 
American bankers of the first rank felt justified in 
joining in the warning. These American signa¬ 
tories were Gates W. McGarrah, of New York; 
John J. Mitchell, of Chicago; J. P. Morgan, of 
New York; Thomas N. Perkins, of New York; 
Melvin A. Traylor, of Chicago, and Albert H. 
Wiggin, of New York. 


— 36 — 



Tariff Walls and Economic Power 


6. The World Economic Conference of 1927 

Since the publication of the International 
Bankers’ Manifesto the campaign for a reduction 
of Europe’s tariff barriers has gone forward with¬ 
out ceasing. The World Economic Congress, 
which met in Geneva under the auspices of the 
League of Nations in 1927, took a strong position 
in support of the draft agreement which the 
League drew up for state signatures, an agree¬ 
ment that would abolish prohibitions on imports 
and exports. It likewise went on record for a 
general lowering of tariff walls. The method 
which the conference approved for securing this 
reduction was threefold: 

1. Unilateral action, by which each country 
would act independently, in the hope that other 
countries might thus be induced to do the same. 

2. Bilateral action, by which pairs of countries 
would negotiate reductions on the tariffs of 
articles of special interest to themselves, with the 
advantages of these reductions then being ex¬ 
tended to other countries by virtue of the most 
favored nation clause in commercial treaties. 

3. Multilateral action, by which collective 

— 37 — 



The United States of Europe 


agreements would be negotiated between large 
groups of nations for the simultaneous removal 
of barriers and reductions of tariffs. 

At a result of the adoption of this program, 
there was for a time at least a diminution of the 
demand for an increase in tariffs. It cannot be 
said, however, that there was any considerable 
amount of tariff reduction, and European states¬ 
men generally assert that, considering the eco¬ 
nomic situation as a whole, it is characterized 
by slightly higher tariffs in 1929 than were in 
effect when the World Economic Congress tried 
to secure tariff reduction in 1927. 

The International Chamber of Commerce at 
all its biennial sessions has endorsed a program 
on tariff reduction similar to that of the World 
Economic Congress. The general position of this 
important body may be summarized by the action 
of its special Trade Barriers Committee stating 
that it “believes that the number and height of 
customs tariffs hamper international trade, and 
that it is essential that governments should be 
induced to consider the reduction of customs dues 
by means of an extended system of mutual agree¬ 
ments.” 


-38- 



Tariff Walls and Economic Power 


To an American, accustomed to absolute 
freedom of trade within the vast territories of the 
48 states comprising the United States of America, 
the European tariff situation seems like a night¬ 
mare. Not only is he exasperated to discover 
that, if he wishes to sell in European markets, he 
must surmount 27 different customs barriers; he 
is much more at a loss to see how the Europeans 
do any business among themselves. The Ameri¬ 
can is generally a protectionist. He believes in 
tariffs, and high tariffs at that. But he believes 
that these tariffs should surround a territory large 
enough to enclose within itself material resources 
and markets sufficient to keep the bulk of industry 
prosperously employed. And Europe, with its 
mountainous tariff walls shutting off little states 
that can be crossed in a few hours’ train journey, 
seems to him an economic monstrosity. As it is. 

The shortcomings of the European system 
have become equally clear to the European 
banker and to the man of big business. These 
men naturally are the first to feel the pinch of 
artificially restricted industry. It is to the bank¬ 
er’s interest to have goods moving freely, for he 
makes his profits by the provision of credits to 
— 39 — 



The United States of Europe 


sustain the various industrial operations. The 
man of big business, on the other hand, cannot use 
the banker’s credit to advantage unless he can 
have fairly free access to raw materials and to a 
market large enough to absorb his products. It 
is no surprise, therefore, to find these men signing 
manifestoes calling for a lowering of tariff bar¬ 
riers, passing resolutions in the same tenor, or 
joining a United States of Europe movement 
which would place the formation of some sort of 
European customs union as the first plank in its 
platform. 


7. Why Europe's Tariffs Stay High 

Then why doesn’t the movement toward 
tariff reduction make more progress? For, not¬ 
withstanding all the agitation, not only has there 
been no reduction so far; such changes as have 
been made to date have rather been in the oppo¬ 
site direction. The result is that leaders like M. 
Hymans, of Belgium, and Mr. William Graham, 
president of the British board of trade, now call 
upon the delegates to the League Assembly, al¬ 
most in despair, to induce their governments to 
— 40 — 



Tariff Walls and Economic Power 


agree at least not to boost the duties any higher. 
What is the trouble? 

The trouble is that, when a European state is 
revising its tariff, it is not the banker nor the 
technical economist, and even in many cases not 
the man of big business, who gets the ear of the 
legislator. Just as during tariff revision opera¬ 
tions in the United States, it is the man who can 
come to the capital and say to his local repre¬ 
sentative, “I have a factory at such-and-such a 
place in your constituency. If you lower the 
duties on the articles I am manufacturing, I will 
be unable to compete with the factory over the 
border. I will have to close down my factory, 
and all my workers will be thrown on the unem¬ 
ployment insurance benefits. But if you will 
raise the duties, that will make my position ever 
so much more secure. Perhaps I can even hire 
another dozen men. 55 So the tariff barriers slowly 
keep going up rather than down. 

How is this tendency of local interests to 
sabotage the economic interests of Europe as a 
whole to be overcome? M. Briand told the 
Geneva Assembly of the League that there will 
have to be a political solution. By that he means 
— 41 — 



The United States of Europe 


that the governments will have to get together, 
agree that there is to be a general lowering of 
tariffs, and then send out orders to their tariff¬ 
making bodies to carry this common political 
will into effect. Perhaps this is the only way to 
immediate action in the right direction. 

It needs only a slight acquaintance with 
Europe, however, to discover that the present 
European states will never learn how to pool 
their economic resources gladly and effectively 
until they, in the terms of an earlier phrase of 
M. Briand, “learn to speak European. 55 That is 
the fundamental economic trouble in Europe 
today. Except as a convenient geographic term 
there is no such thing as Europe. The peoples do 
not think of themselves as Europeans—they think 
of themselves as Poles and Germans and Lithu¬ 
anians and Croats and all the rest. Neither do 
they realize that there is any community of in¬ 
terest between the different nationalities. 


8 . Poverty and Progress 

It will take, one is forced to believe, hunger or 
the fear of hunger to bring this sense of a com- 
— 42 — 



Tariff Walls and Economic Power 


munity of interest home to the masses of Europe. 
Already, those who are trained to study and un¬ 
derstand the economic conflict into which their 
states are entering have this fear of future hunger 
large before their eyes. They are the ones, like¬ 
wise, who have already taken up with the move¬ 
ment for a United States of Europe. But as for 
the masses, it will be a long time before they 
comprehend the new idea, and a longer before 
they are ready to support it. The most bitter 
suspicion of neighboring peoples is to be found 
today in Europe among the poorest classes. 

Yet economic developments seem certain to 
force the common folk, at least in Europe’s highly 
industrialized states, to reckon increasingly with 
the effect of present nationalistic divisions on 
their own welfare. Already unemployment is a 
daily threat to a large proportion of Europe’s 
working classes. For example, in December, 
1928, statistics gathered by the League of Nations 
showed 16.7 per cent of all the trades unionists in 
Germany to be wholly, and 7.5 per cent to be 
partially, unemployed. At the same time, 25 per 
cent of Denmark’s trade unionists were out of 
work; as were 10 per cent of all those in the com- 
— 43 — 



The United States of Europe 


pulsory insurance scheme of the Irish Free State; 
22.1 per cent of Norway’s trade unionists; 11.5 
per cent of the members of Dutch unemployment 
insurance societies; 11.2 per cent of the insured 
workers of the United Kingdom, and 17.3 per 
cent of Sweden’s trade unionists. 

It is hard to see how these figures can be much 
improved so long as each European country con¬ 
ducts its industrial affairs as though it were at 
war with all its neighbors. International cartels 
and special tariff agreements are, as we shall see, 
to some extent already mitigating this general 
economic warfare. But unless European indus¬ 
tries can be assured large markets for unhindered 
development, no mass production in the modern 
sense, employing large numbers of workers and 
paying them high wages, is possible. 

Even in the case of the farmer, the present 
system of tariff barriers is a sentence to perpetual 
poverty. In recent economic disputes, for ex¬ 
ample, Germany has felt it necessary to make it 
practically impossible for Polish farmers to send 
pigs and potatoes into Germany. Of course this 
leads to reprisals on the Polish side. The result 
quickly comes to be a situation in which the 
— 44 — 



Tariff Walls and Economic Power 


farmers on both sides of the line are unable to 
dispose of their product except in the restricted 
home market. Here they are practically at the 
mercy of the middleman. The abject poverty 
which marks most European agriculture is to a 
large extent a result of this inability to exchange 
farm products across national boundaries. 

The time has not yet come when the European 
laborer, whether factory hand, miner or farmer, 
perceives this direct connection between his eco¬ 
nomic distress and the mutual exclusiveness of the 
political units of Europe. But he is learning. To 
some extent, he is learning at the hands of polit¬ 
ical propagandists—liberals, socialists, commu¬ 
nists. To a larger extent, he is working the lesson 
out of his own bitter experience. When the lesson 
has been grasped by enough of the toilers there 
will be a power behind the demand for an inte¬ 
gration of the continent which cannot be denied. 


— 45 — 



CHAPTER III 


EUROPE’S RECOVERY FROM THE WAR 
i. Ten Years After Versailles 

Everything in Europe dates from the war. 
Economically, the war was a vast nightmare. For 
more than four years it let loose destruction. 
Even the neutrals suffered. It is true that, as was 
stated on a previous page, the war stress pro¬ 
duced a large amount of industrial building of 
certain kinds. But the permanent economic 
value of much of this building is very doubtful. 
And over against any possible gains must be 
placed such enormous and unquestionable losses 
as to make Europe’s balance sheet, at the close of 
the fighting, look like hopeless bankruptcy. 

In the general economic disaster brought upon 
Europe by the war, neutrals suffered almost as 
much as combatants. They did not, to be sure, 
undergo the terrible losses in man-power that 

Note: Statistics in this chapter are, unless otherwise stated, taken 
from the Monthly Bulletin of Statistics, July 1929, published by the 
League of Nations. 


— 46 — 


Europe’s Recovery from the War 


were inflicted upon the warring states. But the 
same shortage of capital, the same restriction of 
credits, the same dislocation of markets, and in 
many cases the same disappearance of savings 
befell them. In Holland, for example, which in 
1913 was exporting products with a monthly 
average value of 255,453,000 gulden, the war 
reduced this trade to a point where, in 1918, it 
averaged only 31,768,000 gulden a month. And 
even today, ten years after the close of the struggle, 
Holland’s balance sheet for 1928 shows an average 
of exports monthly of only 165,515,000 gulden. 

Yet facts like these are not to be taken as 
representing the present state of European in¬ 
dustry as a whole. The truth is that large por¬ 
tions of European industry have performed an 
amazing comeback from the destruction of the 
war. Whether you travel in what were once the 
devastated areas of northern France, in the Ruhr, 
in Belgium, or in the new states of central and 
southeastern Europe, the evidences of this eco¬ 
nomic recovery are equally impressive. There 
has taken place, for considerable portions of 
Europe, not only a recovery of industries that 
ten years ago were nearly prostrate, but an abso- 
— 47 — 


The United States of Europe 


lute transformation of the industrial structure into 
forms entirely new, in order to compete success¬ 
fully under the demanding conditions of the post¬ 
war world. 

Taking European industry as a whole, it 
can be said that, with the possible exception of 
Russia, the total of production is today at least 
equal to, and in most countries surpasses, that of 
1913. And even in the case of Russia, which will 
be discussed in a separate chapter, it should be 
said that there has now been completed success¬ 
fully the first year of a five-year development 
program which, if carried through to its intended 
end, will provide that country with an industrial 
establishment beyond anything dreamed of in 
tsarist days. 

Europe’s economic recovery really dates from 
some time in 1925. It was in that year that pro¬ 
duction figures in most of the European states 
were finally brought back to the pre-war stand¬ 
ards. Three things contributed, at that time, 
to the recovery. In the first place, by 1925 the 
states of western Europe had recovered from their 
bolshevism fright. Even in Germany, which had 
been most exposed to Russian influence and prop- 
— 48 — 


Europe’s Recovery from the War 


aganda, it became clear that the loudly adver¬ 
tised communist revolution had been indefinitely 
postponed. The Red menace, which had been a 
genuine threat to the business men of Europe, 
in contrast with its chimerical nature in America, 
faded away. 

Moreover, by 1925 Europe had begun to 
move along the road toward a stabilized currency. 
Any large industrial revival was obviously out of 
the question during the period of inflation. As 
long as banking and industrial processes were 
being carried on in a debased currency, business 
was nothing more than a form of gambling on 
the day’s exchange. And finally, with confidence 
and credit restored by the evaporation of the 
Red menace and the stabilizing of the currency, 
European industry was by 1925 ready to enter 
on that process of rationalization which makes it 
such a formidable competitor for world markets. 
Of that more later. 

2. The Comeback in Coal Production 

The extent of Europe’s industrial recovery 
may be suggested by her production figures in 
— 49 — 



The United States of Europe 


the basic commodities. Take the case of coal. 
In the countries that gained coal territory by the 
war, the figures of average monthly production 
show an enormous increase. France, which was 
producing on the average 3,338,000 metric tons 
a month in 1913, brought her coal production 
up ^4,315,000 tons in 1927 and 4,288,000 tons 
in 1928. Poland, which had an average of 748,- 
000 tons a month in 1913, produced 3,174,000 
in 1927 and 3,383,000 in 1928. Belgium, with 
territory largely unchanged, shows an increase of 
from 1,903,000 tons average per month in 1913 to 
2,298,000 in 1927 and 2,295,000 in 1928. 

Even more striking is the case of Germany. 
On their face, the figures of Germany’s coal pro¬ 
duction show a loss. Her monthly average in 
1913 was 15,842,000 metric tons; in 1927 it was 
12,800,000 and in 1928 it was 12,573,000 tons. 
But this apparent loss is, when Germany’s terri¬ 
torial losses from the war are taken into account, 
seen to be a real gain. The actual fact is that 
Germany is today mining more than 25 per cent 
more coal than she mined in her present terri¬ 
tories before the war. And if you take the coal 
production for the whole of Germany as she was 
— 50 — 


Europe’s Recovery from the War 


before the war, and compare the average for 
five years before 1914 with the production of the 
restricted Germany of today, you will find that 
the disparity is only about five per cent. In 
other words, Germany has already practically 
made up for her loss of Alsace-Lorraine and the 
most important parts of upper Silesia, and for 
her at least temporary loss of the Saar valley. 

Take the matter of steel. Here the figures 
are equally revealing. France was producing, on 
the average, 391,000 metric tons of steel a month 
in 1913. In 1927 she averaged 692,000; in 1928 
770,000 tons. Belgium was producing an aver¬ 
age of 206,000 tons a month in 1913. So com¬ 
pletely was her industrial life wrecked by the war 
that in 1918 her production had actually fallen 
to 1,000 tons a month! But in 1928 she had 
climbed back to 328,000 tons. And in Germany, 
despite the war losses, the production of 1,467,000 
tons a month in 1913 has now been practically 
made up, for the 1928 monthly average stood at 
1,210,000 metric tons. In this, there was a drop 
from the 1,359,000 tons monthly average of 1927, 
part of which may be due to restriction under 
orders of the cartel. Already, Germany is pro- 

— 51 — 



The United States of Europe 


ducing in the vicinity of 25 per cent more steel 
than she produced in her present territory in 1913. 


3. Imports and Exports 

I do not want to tire the reader with statistics. 
But, as a final illustration of the extent of Europe’s 
economic recovery, the figures as to exports and 
imports in some of the key countries of the con¬ 
tinent are illuminating. These figures are sup¬ 
plied by the economic section of the League of 
Nations. In Holland, as we have seen, exports 
are down. Imports are equally down. But now 
look at some of the other countries, the countries 
most torn up by the war: 

Germany imported goods with an average 
monthly value of 897,474,000 marks in 1913; 
in 1928 the monthly average was 1,137,000,000 
marks. Germany’s exports averaged 841,436,000 
marks in 1913; in 1928 they were 982,100,000 
marks a month. In Belgium, where the change 
in the value of the franc needs to be taken into 
account, the rise in export values is from 302,882,- 
000 francs in 1913 to an average monthly of 
2,505,935,ooo in 1928; the import rise is from 

— 52 — 



Europe’s Recovery from the War 


386,384,000 to 2,620,430,000 francs in the same 
period. Roughly speaking, this shows a gain in 
actual value of about 65 per cent in exports and 
35 per cent in imports. 

The figures for France are equally striking. 
In 1913 the monthly average value of France’s 
imports was 701,778,000 francs; in 1928 it was 
4,454,022,000 francs. In 1913 the average 
monthly value of her exports was 573,351,000 
francs; in 1928 it was 4,278,900,000 francs. 
Again the figures have to be corrected for the 
change in currency value, the 1913 franc being 
worth, on the dollar scale, about five times the 
1928 franc. This shows that while France’s im¬ 
ports have increased about 27 per cent over the 
pre-war level, her exports are up practically 50 
per cent! And in Italy, allowing for the lire’s 
decrease in value, while imports are up by about 
80 per cent, exports are also up by 65 per cent. 

Behind these bald figures lie some of the most 
remarkable transformations in economic history. 
On a later page I will tell something of the way 
in which a highly industrialized country like 
Germany, by the application of processes that she 
calls rationalization, has made over her industrial 
— 53 — 



The United States of Europe 


structure in order to make this recovery from the 
war possible. At this point, however, it is more 
illuminating to consider what has taken place in 
France. 


4. The Recovery of France 

The Frenchman has long been known as an 
individualist. Whether he was employer or em¬ 
ployee, a farmer or an urban dweller, he has 
wanted to go his own way with a minimum of 
control from outside himself. Yet in the past ten 
years French industry has become as coordinated, 
as “trustified,” as any in Europe. This is what 
has happened: 

France came out of the war facing a situation 
about as menacing, from an economic point of 
view, as could be imagined. She had lost 1,500,- 
000 killed and 1,000,000 mutilated from the 
ranks of her producers. Her debt had increased 
by 372 per cent. Her taxes were up 75 per cent. 
And she had the devastated regions of her north 
to restore. 

Some of her population losses France made 
good by the annexation of Alsace-Lorraine, con- 
54 



Europe’s Recovery from the War 


taining 1,700,000 people, under the peace treaty. 
The rest of them she more than made up from 
immigration. About a million immigrants have 
settled in France since the end of the war; most 
Americans do not realize that, next to the United 
States, France is now the largest recipient of 
immigration of any nation. 

The restoration of the destroyed areas she 
attacked with such vigor that the huge task was 
completed by the end of 1925. To one who 
remembers what the country around Amiens, 
Arras, Lens and the other industrial centers of 
northern France was like when the fighting ceased 
in 1918, the restoration that has taken place there 
seems beyond belief. Not only have industrial 
plants been rebuilt with the finest machinery that 
the world affords, but whole towns have been 
brought back into being, and the avenues of 
transport, both by rail and motor, constructed 
on a scale and with a perfection that pre-war 
France knew nothing about. There is no finer 
industrial region in all Europe today than this 
section which, ten years ago, was nothing but a 
desolation of shell-churned ruins. 

Even the crisis through which French cur- 

55 



The United States of Europe 


rency passed was turned to the benefit of French 
large-scale industry. Professor Francis Delaisi, 
who is probably the most celebrated economist 
in France, explains this seeming impossibility in 
this fashion: “Exactly at the moment the work of 
reconstruction was completed, the fall of the franc 
stopped the loans for the devasted areas; the in¬ 
terior of France, impaired by inflation, reduced 
its purchases; and the clause of the Versailles 
treaty which opened the German market to the 
factories of Alsace-Lorraine, expired. In spite of 
this our industrialists succeeded in preventing a 
crisis. They immediately reserved the home mar¬ 
ket to themselves by the aid of tariff duties, which 
they increasingly raised. At the same time the 
depreciation of the currency, which pursued a 
course slow but regular, permitted them to lower 
their price of production. 

“Interest on securities, 55 Professor Delaisi 
continues, “paid in paper francs, diminished 
constantly; the increase in wages followed 
only distantly the increase in prices; the cost of 
transportation remained very low, with the gov¬ 
ernment covering the deficit of the railroads; in¬ 
flation choked direct importation, in real values, 
— 56 — 



Europe’s Recovery from the War 


in proportion that they increased in nominal 
values. Since the selling price, as a consequence 
of protective tariffs, remained high, the margin 
of profit was maintained.” 

It was under the opportunities offered by this 
same period that the old individualism was driven 
out of French business. The big industrial con¬ 
cerns took advantage of the smaller and weaker, 
whose stockholders were in a panicky frame of 
mind which made them willing to sell at bargain 
prices, to buy them up right and left. As a result, 
every major branch of French industry is today 
controlled by two or three powerful groups. 

These groups immediately began to make 
money by the development of foreign markets. 
It was a period when other countries were re¬ 
stricting their foreign markets; the United States 
through the height of her tariff, Germany and 
England through their currency adjustments. 
France, and Belgium as well, by delaying their 
stabilization, gave their industrialists a maximum 
of time during which they could sell abroad for 
gold and pay at home in paper. Under such a 
condition, French business boomed. Not only is 
it true that there has not been a man out of work 
— 57 — 



The United States of Europe 


in France since the close of the war; the favorable 
situation in which French industry has found it¬ 
self has made it possible, as already stated, to 
provide work for about a million immigrants. 

The stabilization of the franc, when it came, 
hit the individual Frenchman hard. The indi¬ 
vidual Frenchman has been noted for his thrift. 
The goal of his life has been the accumulation of 
enough capital to make it possible for him to 
retire and live on the interest. Up to the period 
when the franc took its nose-dive toward extinc¬ 
tion, the Frenchman with an income from invest¬ 
ments of 10,000 francs a year could live in the 
height of comfort. But when the franc fell to a 
value of only two cents, to return finally to only 
four cents, such a man had to go back to work in 
order to live. Stabilization, which wiped out 
four-fifths of the value of the franc, together with 
the bankruptcy of most of the countries in which 
French investors had placed their savings—Rus¬ 
sia, Austria-Hungary, and Turkey—destroyed the 
typical French rentier . The Frenchman who lives 
on his income has practically ceased to exist. 

One might think that such an experience 
would cut the root of French thrift. Yet the 
— 58 — 



Europe’s Recovery from the War 


Frenchman goes on saving. He is piling up 
money rapidly for new investments. The deposits 
in the three largest credit establishments in France 
have already risen from 22 billion francs in 1926, 
to 26 billion in 1927 and 133 billion in 1928! 
This means, of course, that the money the French¬ 
man managed to get abroad during the period 
when the franc was heading toward the abyss is 
now being brought home again, where it is avail¬ 
able for new investment. France is rapidly resum¬ 
ing her old place as the banker of the continent. 
It is interesting to note that much of her current 
financial activity is taking the form of short-term 
loans to Germany. 

What is true of France’s economic recovery 
from the war is true, although hardly to an equal 
degree, of almost every other country in Europe. 
Even in the case of England, where conditions 
are admittedly far from rosy, and where the 
prophets of coming industrial tragedy are abroad 
everywhere in the land, the situation is certainly 
not as bad as some have painted it. I will speak 
specifically of conditions in some of these other 
countries—England, Germany, Poland, Russia— 
at other points in this book. 

— 59 — 



The United States of Europe 


5. Economic Problems That Remain 

In giving this picture of recovery from the 
disaster of the war, I do not mean to intimate 
that all Europe’s economic problems have been 
solved. In the case of France, for example, her 
rapid industrial development has been paralleled 
by an almost equally rapid agricultural falling off. 
Thus, Professor Delaisi, in his final summary of 
the French economic situation, gives these figures: 

Average 1909-’13 1927 

Net industrial balance Minus 524,000,000 frs. Plus 1,498,000,000 
Net agricultural balance Minus 779,000,000 Minus 1,260,000,000 
General balance Minus 1,303,000,000 Plus 238,000,000 


It will be seen that this favorable balance de¬ 
pends on the prosperity of her industrial expor¬ 
tation, which must make up for an increasing 
agricultural deficit. 

It has been impossible to obtain figures which 
show the extent of the agricultural depression in 
other European states in terms of money. A fairly 
clear indication of the situation may, however, 
be obtained from the statistics published by the 
League of Nations regarding imports and ex¬ 
ports. A study of these discloses facts such as the 
following: 


— 60 






Europe’s Recovery from the War 


In Germany, in 1913 imports of live stock 
totalled 2.6 per cent of the nation’s total imports; 
imports of articles of food and drink made up 25.1 
per cent of all imports. By 1927 these imports, 
in terms of 1913 valuations, had fallen to 1.5 per 
cent in the case of live stock and increased to 26.6 
per cent in the case of food and drink products. 
Exports of live stock stood absolutely stationary 
during the same period, being one-tenth of one 
per cent in both cases, but there has been a sig¬ 
nificant falling off in exports of food stuffs, which 
made up 10.5 per cent of Germany’s total exports 
in 1913 and were but 4.6 per cent in 1927. 

A study of the exports of other countries shows 
that the drop in agricultural products has been, 
in the case of Austria, from 2 per cent of the 
national total of exports in 1922 to 1.7 per cent in 
1927; Belgium, from 9.9 per cent in 1925 to 7.9 
per cent in 1927; Hungary from 57.5 per cent in 
1925 to 54.2 per cent in 1927; Russia from 57.2 
per cent in 1913 to 48.5 per cent in 1927. The 
states that are increasing their agricultural exports 
are Spain, Esthonia, Latvia, Lithuania (very 
slightly), Norway, the Netherlands, Poland, 
Sweden, Switzerland and Czechoslovakia. No 
figures are available for other states. 

— 61 — 



The United States of Europe 


The agricultural decrease is thus seen to con¬ 
front a great part of Europe. With that goes a 
whole complex of other economic problems. 
There are states which cannot, because of their 
nature or because of the backwardness of their 
development, hope to be prosperous under the 
present economic system during the lifetime of 
living men. Such are Austria, and most of the 
Balkan kingdoms. There is the prevalence of 
low wages, which results in a restriction of mar¬ 
kets. There is the system of what might be 
called false competition, by which the nationalis¬ 
tic pride of states moves them to subsidize, 
through tariffs or otherwise, innumerable indus¬ 
trial plants which have no true reason for exist¬ 
ence. And over and above everything else, 
there is the realization that future prosperity, 
as in the case of France, depends on exports 
to a world market, in which American compe¬ 
tition will be increasingly felt. 

This is, of course, only a hasty suggestion of 
the extent of these remaining economic prob¬ 
lems. It should be clear, however, that in the 
case of most of them the formation of some sort 
of United States of Europe, transforming what 
— 62 — 



Europe’s Recovery from the War 


are at present small and conflicting economic 
units into a single economic entity, would have 
an immediate and enormously beneficial effect. 
Europe’s economic recovery has been remark¬ 
able, but she still has a long way to go toward 
permanent prosperity for her peoples. And it 
becomes increasingly doubtful whether she can 
cover the remaining stages of that journey di¬ 
vided into warring groups. 


-63 — 



CHAPTER IV 


THE CARTELS POINT THE WAY 

i. Where Pan-Europe Already Exists 

lEfUROPEAN big business welcomes the pro¬ 
posal for a United States of Europe. In fact, 
European big business is largely responsible for 
proving to skeptical statesmen that a United 
States of Europe is an immediately practicable 
possibility. At the first congress of the Pan- 
European Union, held three years ago in Vienna, 
Herr Paul Loebe, then president of the German 
Reichstag, said: “We maintain that Pan-Europe 
already exists. Economic cartels, trusts in iron, 
steel, coal, wool, cotton, and so forth, are nothing 
more than a realization of economic Pan-Euro- 
peanism by certain groups of capitalists. Now 
we want to make Pan-Europe not only in an 
economic sense but in every sense and for us all. 
Only by this will Europe be saved from catas¬ 
trophe.” 

In thus referring to the international cartels, 
Herr Loebe was pointing to the most significant 
— 64 — 


The Cartels Point the Way 


development in Europe’s large-scale industry 
since the close of the war. For at the very time 
when politicians were following policies which 
involved an intensification of the old divisions 
of the continent, and when the seeds were being 
industriously sown for new quarrels and future 
conflicts, the men at the head of the greatest 
industrial enterprises agreed to ignore national 
boundaries and to tie together plants engaged in 
similar operations without regard to political 
divisions, so that there might be a mutual par¬ 
ticipation in prosperity. As a result, the big 
business man, when he advocates a United States 
of Europe today, is in a position to say to the 
politician, “Why do you not have the sense to 
do in the realm of politics what we have already 
done in that of industry?” 

Europe’s men of big business have no illusions 
as to the stern character of the competitive period 
that lies ahead of them. I have already quoted 
the figures by which Professor Delaisi, the fore¬ 
most economist of France, shows that the future 
prosperity of that nation depends on maintaining 
an industrial balance sufficiently favorable to off¬ 
set an agricultural deficit at home. The same 
— 65 — 



The United States of Europe 


situation exists in all the industrialized states of 
Europe. Yet, with great markets like America 
and Russia practically removed from large- 
scale penetration by European manufactures, and 
with vigorous industrial nations like the United 
States, Great Britain and Japan ready to com¬ 
pete for the trade of the remaining undeveloped 
markets in South America, Africa and Asia, the 
European captain of industry knows that he is in 
for a hard fight if he is to capture or hold enough 
of the world market to maintain a prosperous 
balance at home. 


2. Marshalling Europe's Resources 

But Europe’s big industrialists do not despair. 
Nor is there any reason why they should. They 
know that, within the limits of their continent 
or of the colonies owned by European states, 
there are all the necessary ingredients of modern 
industrial success. There is power without limit; 
huge deposits of coal and, where coal is difficult 
to use economically, unlimited hydroelectric re¬ 
sources. There is iron in enormous quantities. 
There is oil. These are the basic requirements 
— 66 — 



The Cartels Point the Way 


of the modern industrial state. But in addition 
to these Europe has, not only other raw materials 
of immense value, but man-power, engineering 
skill, chemical science, and inventive genius in 
impressive proportions. Regarded as an eco¬ 
nomic unit Europe, even with Great Britain and 
Russia left out, has the promise of becoming one 
of the most formidable industrial areas on earth. 

The trouble has been that, up to within the 
last four years, it has been impossible to regard 
her as a unit, either economically or in any other 
fashion. Every one of her 27 states has been a 
principality by itself, jealously guarding its 
borders against all its neighbors. The aim has 
been to make each state a self-supporting, self- 
contained economic unit by itself, and the in¬ 
dustry of other European states has been treated 
as an enemy to be destroyed rather than as a 
possible ally to be encouraged. 

Obviously, it was—and is—impossible to de¬ 
velop European industry to the natural Emit of 
its efficiency while its units were thus cooped up 
within national boundaries. The man who built 
a shoe factory in Czechoslovakia, for instance, 
might install as fine machinery as modern in- 
-67- 



The United States of Europe 


ventive skill can supply, might use the latest 
methods of factory technique and sales distri¬ 
bution, might follow every principle that scien¬ 
tific management has discovered, yet he could not 
bring his enterprise to maximum efficiency as 
long as his market was practically restricted to 
the 14,000,000 people of Czechoslovakia, many 
of whom do not buy more than one pair of shoes 
in three or four years. 

Europe’s industrialists have had the slogan of 
efficiency dinned in their ears for years. As well 
as they could, they have tried to make their 
plants efficient. Germany, in particular, rather 
prided herself on the efficiency of her pre-war 
industrial organization. But all attempts to 
push European manufacturing to a general high 
level of efficiency have been condemned to a 
very limited success as long as the continent has 
been divided by tariffs into mutually exclusive 
and competitive areas. 

It was big business in those traditional ene¬ 
mies, France and Germany, that was the first 
to learn this lesson that seems so obvious to 
Americans. The two states came out of the war 
with their bitterness increased rather than as- 
— 68 — 



The Cartels Point the Way 


suaged. France had the upper hand. She re¬ 
garded it as just that Germany—that is, of course, 
German industry—should be made to bear the 
major part of the costs of the war. In the years 
following the armistice, and indeed up to the 
signing of the'pact of Locarno, this led her to one 
attempt to discipline German industry after an¬ 
other, culminating in the invasion of the Ruhr. 
But that method of going about the restoration of 
European stability and prosperity simply did not 
work. France’s men of big business, notably M. 
Loucheur, perceived that it was not working be¬ 
fore the politicians did. They determined to try 
a new method. 


3. The Coming of the International Cartels 

The first intimation of the new policy, which 
involved the abandonment of the old national 
divisions and rivalries and a union of industrial 
forces on both sides the Franco-German border, 
came with the formation of the potash cartel in 
the spring of 1926. The date is interesting, as it 
shows that French and German men of big busi¬ 
ness started to get together the moment the states- 
— 69 — 



The United States of Europe 


men of the two countries, at Locarno, had given 
notice that the days of constant bitterness and op¬ 
position were at an end. Indeed, the interna¬ 
tional potash cartel was organized before the 
Locarno pacts were ratified by the admission of 
Germany into the League of Nations. 

Most Americans are, by this time, familiar 
with what the European has in mind when he 
speaks of an international cartel. It is, in short, 
in most cases the combining of the various units 
of an industry into an organization that tran¬ 
scends all political boundaries, and that holds 
enough of a monopoly in that industry to divide 
markets, fix prices, and regulate production at a 
point where all the members can be assured a 
profit. Such an organization would undoubtedly 
be pronounced illegal under the Sherman anti¬ 
trust law in the United States. But the cartel 
has provided one principal means whereby 
European big business has made the amazing 
recovery from the war which I tried to sketch in 
a previous chapter. 

This definition of an international cartel per¬ 
haps needs safeguarding at two points. There 
are several of these organizations, as will pres- 
— 70 — 



The Cartels Point the Way 


ently appear, which do not hold a monopoly, 
and which are not seeking such a trade advantage. 
And there is at least one—the cartel in the elec¬ 
tric bulb industry—which has been formed not 
to hold up prices but to standardize and improve 
manufacturing processes. But if these exceptions 
are held in mind, the definition given in the pre¬ 
ceding paragraph may be taken as justified. 

Europe became familiar with cartels before 
the war. These were, I believe in every case, 
held within national boundaries. They took 
many forms. Indeed, one of the principal dif¬ 
ficulties in any extensive study of the cartel 
system, which should take in the national as well 
as the international organizations, would be to 
discriminate between cartels, trusts and cooper¬ 
atives of various sorts. For the purpose of this 
volume it is not necessary to wrestle with this ex¬ 
ceedingly baffling question. We consider here only 
the international cartels, all of which have been 
formed in the last few years and all of which 
are easy to identify. They are the cartels, it 
hardly needs to be said, which include within 
their operation industrial units in more than one 
nation. 


— 71 — 



The United States of Europe 


The first of these European cartels to be 
formed was, as has been said, that in the potash 
industry. The situation which produced that 
combination was a simple one, not much differ¬ 
ent from that which has produced the other 
cartels. When France regained Alsace, by virtue 
of the treaty of Versailles, she came into pos¬ 
session of important potash deposits. But Ger¬ 
many, although she had lost these, had still other 
deposits which were capable of large develop¬ 
ment. And in fact, during the period of un¬ 
restricted nationalist competition that followed 
the peace treaty, the French potash interests and 
the German potash interests, both already or¬ 
ganized in national cartels which between them 
had a practical world monopoly, set about cutting 
each other’s throats. But in the spring of 1926 
the directors of the two groups awoke to the sui¬ 
cidal nature of this policy. The Societe Com- 
merciale des Potasses d’Alsace and the Deutsche 
Kalisyndikat accordingly met at Lugano, agreed 
to combine their resources, and the first great 
European cartel came into being. 

The terms of this agreement give a clear idea 
of the sort of arrangements under which almost 
— 72 — 



The Cartels Point the Way 


all these cartels work. In the case of the potash 
cartel they are easily summarized, because there 
were only two main parties to the negotiations. 
It was decided that the French potash interests 
should have a free field in France and in the 
French colonies; the German potash interests 
should be equally undisturbed in Germany. But 
since the German interests were producing on a 
much larger scale than the French, the world 
market was divided, giving the German approxi¬ 
mately two-thirds and the French one-third. 
However, an arrangement for a sliding appor¬ 
tionment was made, whereby any future change in 
the relative output of the two groups would auto¬ 
matically lead to a readjustment in their share of 
the world market. And potash prices were fixed. 


4. Expansion of the Cartels 

That is the way an international cartel comes 
into being. It is, in the words of Herr Loebe, 
economic Pan-Europeanism already realized. 
For in the wake of the potash cartel there have 
come about fifteen or twenty more of these inter¬ 
national organizations, most of them with their 
— 73 — 



The United States of Europe 


principal plants in Germany and France, but 
also reaching out into Belgium, Czechoslovakia, 
Austria, Rumania, Poland, and elsewhere. In¬ 
deed, there are reported to be American inter¬ 
ests involved in several of the cartels, those in 
zinc, steel rails, tubes and copper, and the arti¬ 
ficial silk plants in Elizabethtown, Tennessee, 
which have been the scene of industrial conflict 
this year, are controlled by the artificial silk cartel 
through its largest German member. The prin¬ 
cipal cartels are in steel, wire, zinc, lead, potash, 
tin, artificial silk, enameled wares, steel rails, 
glue, electric lamps, mirrors, ammonium sul¬ 
phate, glass bottles, aluminum, explosives, and 
copper. As this book goes to press it is announced 
that Belgian, French, German, Swiss, and Czecho¬ 
slovakian interests have completed the organi¬ 
zation of still another cartel, this one for the 
manufacturing of locomotives. 

It is obvious that no combination of European 
interests can obtain even a major portion of the 
production, let alone a monopoly, in several of 
these items. But a monopoly is not necessary to 
make a cartel a success. A general access to the 
materials and markets of all of Europe is enough, 
— 74 — 



The Cartels Point the Way 


European big business has found, to insure profit¬ 
able operation. Thus the steel cartel, which is 
the most important of them all because it is able, 
by its ramifications into all parts of the continent 
where steel is produced, to surmount tariff diffi¬ 
culties, despite its lack of a monopoly has estab¬ 
lished its position as one of the most formidable 
industrial combines on earth. Such a cartel is 
able not only to view the threat of American 
competition with composure, but to enter the 
struggle for other world markets which America 
covets, having at least an even chance of victory. 

In its actual workings, the international cartel 
follows with striking closeness the course of the 
political states. There is the same resting of rela¬ 
tions on treaties; the same tendency of the 
treaties to grow out of date; the same intricate 
maneuvering and negotiating to secure a revision 
satisfactory to all parties. And, of course, if the 
negotiations fail, there is bound to be the same 
breaking off of relations and commencement of 
economic hostilities. The parallel may help to 
show why it is frequently said that international 
relations are ceasing to be a political, while they 
become an economic, matter. 

— 75 — 




The United States of Europe 


5. Life in the Cartels 

As a specific illustration of the sort of thing 
that goes on within an international cartel, I can 
do no better than to quote a dispatch which 
Mr. Sisley Huddleston sent to the Christian Sci¬ 
ence Monitor from Paris in October of the present 
year. Mr. Huddleston is describing the situation 
that exists within the powerful European steel 
cartel as the term of its present agreement draws 
toward its end. “Difficulties have arisen,” says 
Mr. Huddleston, “and in some quarters it is even 
suggested that the option of denouncing the 
arrangements will be exercised on October 31.” 

“This pessimistic view is, however, unjusti¬ 
fied,” Mr. Huddleston hastens to say, “for it is cer¬ 
tain that the majority of members of the European 
steel organization is determined that the cartel 
shall continue to exist, and therefore compromise 
on the points in dispute is practically assured. 

“Germany in particular is dissatisfied with the 
present quota, and is asking for modification of 
the agreement. The agreement was signed Sep¬ 
tember, 1926, by representatives of Germany, 
France, Belgium, Luxemburg, and the Saar, and 
-76- 



The Cartels Point the Way 


its principal object is to regulate production in 
accordance with the demand and to avoid de¬ 
structive competition. Germany had itself, two 
years earlier, regulated its own production among 
German firms, and this national accord was ex¬ 
tended into the international sphere. For obvi¬ 
ously control of such products as iron and steel is 
insufficient if exercised only by one country. 

“Originally the quotas were based on the 
actual production of the participating countries 
during the first quarter of 1926, though allow¬ 
ances were made to Belgium on account of her 
special circumstances. Roughly, Germany was 
given 43 per cent, France 31, Belgium 11, Lux¬ 
emburg 8, and the Saar 6. 

“The German cartel has been prolonged until 
the end of the year and it is expected that the 
international cartel will likewise be prolonged. 
But it is anticipated that the existing basis will 
eventually be altered. If the quota is exceeded 
by any country, it pays an indemnity into a com¬ 
mon fund. This rule works against the country 
which systematically exceeds its quota. 

“The Avenir, which is the organ of certain 
French economic interests, remarks that ‘despite 
— 77 — 



The United States of Europe 


the good will that other states have shown in 
respect of German complaints, Germany insists 
that its quota is too low and that it cannot admit 
provisional prolongation of the cartel on the pres¬ 
ent basis. The situation is complicated by the 
fact that other states, notably Belgium, equally 
find their quota inadequate. It is hoped to reach 
a compromise. 5 

“But, adds the Journal, doubtless in the eco¬ 
nomic domain as in the political, other countries 
will have to purchase the consent of Germany at 
the price of new concessions. 55 

6 . Cartels—Pro and Con 

Naturally, in view of the success of the cartels, 
the proponents of a United States of Europe say, 
“Why not apply the idea further? If it is good 
for big European business, why would it not prove 
equally good for all European business? Is not 
the lesson of the past three years obviously that 
the free movement of materials and products 
everywhere inside the borders of Europe, and the 
encouragement of all business within this area to 
consider its problems on a continental rather than 
-78- 



The Cartels Point the Way 


a national scale, would result in greater stability 
and prosperity for all? 55 The men who have 
formed the cartels are sure that this is true. They 
desire the coming of a day when all business shall 
be organized as European, rather than as German 
or French or that of any other nationality, and 
when all tariffs shall be European. 

Indeed, the influence of big business has been 
so evident in backing the Pan-European move¬ 
ment that some groups, especially of radicals, have 
opposed it for that reason. They see in it, not so 
much a method of transcending and finally wip¬ 
ing out ancient political and economic divisions, 
as a method of bringing the whole consuming 
portion of the continent’s population into the 
power of great international price-fixing com¬ 
bines. This is not the view of most of the labor 
leaders or socialist politicians of western Europe. 
Most of them regard some form of international 
organization and Pan-European free trade as 
necessary to the prosperity of European industry, 
and they therefore favor the cartels. But it is 
true that one portion of the opposition which is 
forming to any extension of the cartel system, or 
to any formation of an economic United States 
— 79 — 



The United States of Europe 


of Europe, is that of social radicals who hold that 
it would be better to have Europe lose all chance 
at industrial power than to have her people under 
the virtual control of trusts and combines. 
Whether opposition of this sort can exert any 
great influence seems extremely doubtful. 

Such American business men as have studied 
the European cartel system seem, on the whole, to 
have been impressed with its dangers as much as 
with its advantages. As I said at the beginning of 
the chapter, the system is obviously in contrast 
with both the legal basis and the traditions of 
American industry. And there is much to justify 
the American business man in his skepticism as 
to the ultimate effect of cartelization on the eco¬ 
nomic life of Europe. Price-fixing combinations 
are always to be viewed with disquietude. And 
an industry that depends on monopoly markets is 
not healthy at its roots. Yet the fact is undeniable 
that the international cartels have, in their actual 
working, helped enormously to hasten Europe’s 
economic recovery, while they have contributed 
probably more than any other one factor to the 
instruction of Europe in the art of 4 ‘talking 
European.” 


— 80 — 


The Cartels Point the Way 


The international cartels are not the only 
feature of European big business that have had 
a major part in its recovery from the war. The 
reconstruction of that business according to new 
efficiency principles—what is generally spoken of 
as the rationalization movement—has played at 
least an equal part. Of that I will write in the 
next chapter. But I have dealt with the cartels 
first of all because it has been their success that 
has convinced European industrialists that a 
commercial unity that transcends national bound¬ 
aries is today politically feasible and economically 
sound. “If we can do it, 55 say Europe’s industrial 
leaders, “the states can do it.” How long will 
it be before they say, “The states must do it”? 


— 81 — 



CHAPTER V 


RATIONALIZATION’S LOGICAL 
CONCLUSION 

i. What Is Rationalization? 

The change that has come over Europe in 
the last decade is well illustrated by the prog¬ 
ress of the rationalization movement. To the 
casual observer, rationalization will seem to af¬ 
fect only Europe’s industrial life. But as a matter 
of fact, the adoption of rationalization by Euro¬ 
pean business men indicates a fundamental 
change of attitude, not only in industry, but 
throughout European society as a whole. 

In the years before the war a large portion 
of the industry of the continent was conducted 
on what seemed to outsiders as a much too per¬ 
sonalized, lackadaisical, rule-o’-thumb basis. In¬ 
dustrial organizations—even the best of them— 
were weighted down with family connections, 
pensioners, and other persons whose contribu¬ 
tion to production was hard to discover. Selling 
methods seemed to be largely a matter of per- 
— 82 — 


Rationalization’s Logical Conclusion 


sonal accommodation and social connection. 
And if the outsider looked on the whole system, 
or lack of system, with scorn, the European re¬ 
garded with equal scorn the aggressiveness of 
the Yankee or the shopkeeping—which is to say, 
commercial—tendencies of the Englishman. 

Today, all that is changed. No longer does 
the continental European regard industry as a 
socially degrading scope for his activities. No 
longer is he content to have the industries in 
which his funds are invested run on haphazard 
and antiquated lines. Instead, he is insisting that 
the latest methods of industrial practice, what¬ 
ever their origin, shall be applied to European 
conditions and firms. The European investor is 
just as intent on wringing the last possible pfen¬ 
nig of profit out of his present-day industries as 
is any American efficiency engineer. And his in¬ 
sistence has produced rationalization. 

What is rationalization? The word is uni¬ 
versally used in connection with European in¬ 
dustry, but it is not easy to define. It is, in fact, 
more a slogan than a precise title. It is a rallying 
cry for the exponents of the new-fashioned Euro¬ 
pean industry. When the World Economic Con- 
-83- 



The United States of Europe 


ference, meeting in Geneva in 1927, passed its 
sweeping resolution of endorsement of the ration¬ 
alization movement, the International Manage¬ 
ment Institute, in reproducing the action, added 
this note: “The word Nationalization’ is used 
on the continent as synonymous with ‘scientific 
management.’ ” 

Perhaps this is as easily remembered and as 
generally satisfactory a definition as any. But 
close students of the rationalization movement 
will insist that it hardly gives due recognition 
to all the elements that are involved. The defi¬ 
nition of the World Economic Conference spoke 
of rationalization as “the methods of technique 
and organization designed to secure the minimum 
waste of either effort or material. It includes 
the scientific organization of labor, standardi¬ 
zation both of material and products, simplifi¬ 
cation of processes, and improvements in the 
system of transport and marketing.” 

When all the efforts at definition have been 
made, one is likely to sympathize with Mr. Walter 
Meakin, who remarks that “it is questionable if 
any word of recent coinage, relating to industrial 
and economic affairs, has created so much con- 
— 84 — 



Rationalization’s Logical Conclusion 


fusion of thought or provoked so many diverse 
and contradictory interpretations.” The fact 
seems to be that it is still too early to give a 
definition that will hold true everywhere. The 
word means different things in different countries. 
It was originally the German “rationalisierung,” 
and grew out of the rationing of raw materials 
and production to which German industry sub¬ 
mitted itself in the critical days following the 
Ruhr invasion. But now, as an international 
term, its final content has yet to be determined. 

It is easier to make clear the meaning of the 
term by describing the operations which are called 
rationalizing than by attempting a definition. 
These operations are under way all over Europe 
at the present time. In some cases they are 
confined to an individual firm, as in the great 
Citroen motor works in France. In other cases, 
they operate within a trust. And in still other 
cases they are being applied to entire cartels, 
both national and international. 

To make the rationalizing process clear I will 
refer briefly to its application to three basic Ger¬ 
man industries. Those who wish to study this 
development more fully will find the history of 
— 85 — 



The United States of Europe 


the rationalization of these three industries given 
in detail in Mr. Walter Meakin’s recent book, 
“The New Industrial Revolution.” 


2. Rationalizing German Coal 

As a first example, consider the rationaliza¬ 
tion of the German coal mines. Here, by the 
way, is a basic industry that has never been 
cartelized. There is a coal trust, but no coal 
cartel. Following the collapse of the French in¬ 
vasion of the Ruhr, which had put most of 
Germany’s coal in alien hands, the industry found 
itself facing a desperate situation. Not only had 
the French occupation seriously affected the 
efficiency of mine operations, but other influences 
had begun to operate at the same time to cut 
down the demand for coal. The increasing use 
of oil and water power; the introduction of fuel¬ 
saving furnaces (an interesting example of the 
way in which one species of rationalization can 
work against another); the development of new 
coal producing areas—all these were having a 
depressing influence. Moreover, production costs 
were mounting, wages had fallen to the point 
— 86 — 



Rationalization’s Logical Conclusion 


where the workers were on the verge of revolt, and 
surplus stocks had piled up in ominous fashion. 

This was the situation that forced Germany’s 
coal operators to rationalize. They began by 
studying the mining situation as a whole, and 
summarily closing such mines as were not likely 
to be able to produce coal at reasonable costs. 
Twenty-six mines, employing 37,000 workers, 
were thus shut down in the first year of the 
rationalization process, 1925. Following this, the 
industry closed off the unproductive parts of 
other mines that were continued in operation. 
Then the whole matter of technical equipment 
was re-studied. Improved machinery and im¬ 
proved methods of transport in the mines greatly 
increased the average of production per worker, 
while lowering the number of workers required. 
Finally, the whole industry was reorganized to 
utilize its by-products, so that the typical German 
coal mine, under rationalization, is a center for 
the production of a wide range of materials which 
can be counted on to return a profit even when 
the condition of the coal market may make the 
actual mining operation for the time being a 
losing one. 


-87- 



The United States of Europe 


“In the Ruhr, 55 says Mr. Meakin, “almost 
every mine now left in production might be de¬ 
scribed as a huge coal-using as well as a coal¬ 
getting undertaking, and all the associated coking, 
by-product, and power enterprises are regarded 
as an integral part of the coal industry. The head 
chemist and the chief engineer share fully with 
the mine director the status of control and the 
responsibility for the progress and success of the 
enterprise as a whole. The Ruhr companies, 
indeed, are coming to look more and more to the 
revenue from their coal-using activities—coking, 
the production of raw materials and valuable 
‘intermediates 5 for the chemical industries, direct 
association with public electrical supply under¬ 
takings, and the cooperative sale of surplus gas 
and steam for public services—as the most stable 
source of their profits. 55 

An American, studying this development of 
Germany’s coal fields, is likely to wonder whether 
the same system of rationalization might not 
wisely be applied to the mining industry in the 
United States. 


— 88 — 



Rationalization’s Logical Conclusion 


3. What Happens to the Workers? 

Undeniable as are the technical advances 
made under rationalization, the question always 
arises as to what happens to the workers when 
these processes are introduced. The United 
States is now confronted with a condition known 
as “technological unemployment” which holds 
thousands of men out of work. To what extent 
does the introduction of efficiency machinery and 
methods do the same thing in Europe? The 
rationalization of the German coal industry gives 
as vivid an illustration of the ensuing process as 
could be asked. 

In the first place, it must be admitted that 
rationalization does throw men out of work. 
German coal mines had to be partially re-staffed 
during the war. Then, with the armistice, large 
numbers of miners returned from the army and 
tried to find a place again in their old occupa¬ 
tions. The result was that, in the Ruhr, there 
were 553,000 mine workers by 1923. But the 
introduction of rationalization steadily reduced 
this number to 355,000 in May, 1926, from which 
low point there was an increase, produced by the 
-89- 



The United States of Europe 


effect of the strike in England. At the end of 
1927 there were 155,000 fewer miners at work 
than in 1922. There had also been a drop in the 
number of technical and administrative mine 
officials, from 28,800 in 1922 to 23,500 in 1927. 

What happened to the men thus displaced? 
The expansion in other trades, following the 
adoption of the Dawes plan, provided work for a 
good many of them. Some of them went back to 
the farms from which they had come originally. 
Others went into the building trades, which have 
experienced a boom. But there were still others 
who could not be immediately placed, and these 
have been dependent on unemployment insur¬ 
ance. The working of the unemployment in¬ 
surance plan will be discussed elsewhere. 

For the men who remained in the mines, the 
effect of rationalization was much more benefi¬ 
cial. The working day was reduced by half an 
hour; employment became so steady that the 
average loss of time by the middle of 1927 was 
only half a shift a month; and wages slowly 
began to rise. In comparing the wages of Ger¬ 
man miners with those in, say, Great Britain and 
the United States, it must be borne in mind that 
— 90 — 



Rationalization’s Logical Conclusion 


the German miner, although he works at a lower 
rate, works steadily. In the long run, therefore, 
his actual income, when reckoned in comparison 
with the cost of living in German mining towns, 
will put him in an economic position little, if 
any, inferior to that of miners elsewhere. 

The effect of the introduction of new proc¬ 
esses, made possible by labor-saving machinery, 
is strikingly shown by the statistics of output per 
worker in the German coal mines. Mr. Meakin 
gives these figures covering the output per man 
per shift in the Ruhr: 



Hewers and 

All Under ¬ 

All Workers 


Assistant 

ground 

Above and 


Hewers 

Workers 

Below Ground 

Period 

cwts . 

cwts . 

cwts . 

1925 

37 

23 

18.6 

1926 (January) 

40.6 

25.6 

20.7 

1927 (January) 

42.5 

27.O 

22.4 


A basis of comparison, to show the extent to 
which the German mine owners by rationaliza¬ 
tion were increasing production per unit of 
workers, is given by the fact that the average out¬ 
put of all British mine workers in 1925 was 17.70 
cwts. per shift, which rose to 20.82 cwts. in 1927, 
when an hour was added to the working day. 

— 91 — 



The United States of Europe 


4. Reorganizing the Steel Trust 

The reorganization of the German steel trust 
is equally interesting. The process has not dif¬ 
fered essentially from that followed in coal. It 
really began with the formation of the great steel 
trust, and the rationing of the new ore supplies 
obtained, in large degree from Spain and Sweden, 
to make up for those lost as a result of the war. 
Plants were combined; overlapping production 
in different plants was eliminated or greatly re¬ 
duced; inefficient equipment was scrapped; cer¬ 
tain plants were set aside to produce certain 
goods; steel products generally were standard¬ 
ized; manufacturing centers were shifted in order 
to give the closest possible relationship either to 
materials or markets, or both; technical improve¬ 
ments in manufacturing processes were constantly 
sought, and when discovered were introduced, 
no matter how new the machinery thus thrown 
out; sales organizations were unified; a common 
buying organization was set up; wages have 
gradually gone up. 

Although there is not as much information 
available concerning the results of this policy of 
— 92 — 



Rationalization’s Logical Conclusion 


rationalization in the steel as in the coal industry, 
some facts are known. That there have been 
considerable savings in production costs is ad¬ 
mitted, although the steel producers argue that 
these have been eaten up again in the increase 
of wages, increase of enforced contributions to 
social service schemes, and increase in taxes. 
However, it has been possible to reduce substan¬ 
tially the number of men employed in various 
processes, although the boom in the industry as 
a whole, brought about by the replacement of 
war losses, brings the total number employed by 
the steel trust to a new high point. The average 
daily output of the worker had gone up by 36 
per cent before the first year of the rationaliza¬ 
tion process had closed. At the same time, there 
was a general decrease in the length of the work¬ 
ing day, although this was bitterly fought by the 
steel companies. 

The justification of such a policy in terms of 
dollars and cents came when the German steel 
trust made public its balance sheet covering the 
year that closed on September 30, 1927. A gross 
surplus of approximately $70,000,000 was re¬ 
vealed. Against this there had to be charged off 
— 93 — 



The United States of Europe 


such items as $15,000,000 for taxes; $12,500,000 
for unemployment insurance; $7,500,000 for in¬ 
terest on loans; and the sizeable sum of $21,250,- 
000 for depreciation. This latter figure deserves 
attention. It shows the extent to which industry 
committed to rationalization must be prepared 
to scrap machinery which, although it has been 
in service only a short while, is made out of date 
by new technical developments. For example, 
this scrapping process in Germany has brought 
about the closing down of coking furnaces after 
only three years of service, in order to take ad¬ 
vantage of the savings to be effected in later 
types. But with all these necessary charges, the 
steel trust was still able to declare a 6 per cent 
dividend. This, less than ten years after the 
close of the war! 

Although it is not in the trust, the great Krupp 
plant at Essen gives a graphic illustration of 
rationalization in the German steel industry. The 
peace treaty put an end to Krupp’s most profit¬ 
able business; the French invasion nearly put 
an end to the entire business. By 1926 the num¬ 
ber of workers employed had fallen from more 
than 40,000 in 1920 to only 18,000. And at the 
— 94 — 


Rationalization’s Logical Conclusion 


same time it became apparent that several of the 
lines of manufacturing which had been under¬ 
taken to replace the old munitions making would 
not return a profit. Drastic rationalization was 
therefore adopted. This began in the Krupp 
coal mines, where the installation of the latest 
machinery, new coking plants, and the utiliza¬ 
tion of by-products quickly reduced labor costs. 
Pig-iron production was concentrated at the most 
efficient furnaces, which were given the most 
modern equipment and methods of handling. 
Older steel furnaces and buildings at Essen were 
scrapped; the new lines of manufacture that 
were not paying were abandoned; working costs 
were reduced all around; selling effort was con¬ 
centrated behind the profitable items. The result 
was that Krupp was again employing more than 
40,000 men by the end of 1927, and the firm’s 
prosperity seems assured. 

5. German and British Chemical Strategy 

The rationalization of the chemical industry 
presents much the same story. Here, again, there 
had been loss of markets due to the war, and the 
— 95 — 



The United States of Europe 


appearance, under war stimulus, of competition 
in other lands that would make the reestablish¬ 
ment of the pre-war monopoly in certain chemical 
products impossible. However, the closely or¬ 
ganized German chemical trust set about re¬ 
creating its markets with confidence, believing 
that, by the perfection of former processes and 
the discovery of new, it could secure for itself a 
place as stable as that held before the war. While 
there has not been as much publicity concerning 
the methods employed—secrecy seeming to be 
inseparably connected with chemical processes— 
it is known that there has been the same elimina¬ 
tion of unprofitable plants and processes; the 
same concentration on new inventions and on 
lines in which there is an unflagging demand; 
the same unification of buying and selling meth¬ 
ods. The chemical trust, as a result, has never 
had a year, even in the midst of Germany’s 
worst depression, without a profit. 

It is of interest to note in passing that it is 
only in its chemical trade that Great Britain has 
begun to parallel the German rationalization 
process. Here, in the words of Mr. Meakin, Lord 
Melchett “applied his own precepts in practice. 55 

— 96 — 



Rationalization’s Logical Conclusion 


Mr. Meakin gives a bird’s-eye view of the ration¬ 
alization of British chemical plants in this fashion: 

“Hitherto in Great Britain the prosperity of 
the chemical industry had been based mainly on 
its world supremacy in the production of heavy 
alkalis, just as the German industry had been 
supported mainly by its supremacy in the pro¬ 
duction of dyestuffs. The policy of the Combine 
management was to maintain the alkali position; 
to extend the manufacture of dyestuffs developed 
during and after the war by state aid; to build 
up at Billingham on the Tees a great complex 
of synthetic nitrogen manufacture and associated 
processes, including the hydrogenation of coal 
to produce oil, on a scale comparable to the 
Leuna establishments of the German trust; to 
transform gradually the miscellaneous activities 
of the former separate concerns by scrapping the 
older buildings and plant, and specializing pro¬ 
duction on a full-time basis in new and modern¬ 
ized works; and to concentrate and simplify the 
sales organizations.” 


— 97 — 



The United States of Europe 


6. Rationalization Crosses Europe 

The rationalization process we have thus seen 
going on principally in Germany has gone on all 
over Europe. In a country like Poland, for 
example, where manufacturing is still less im¬ 
portant than agriculture, the rapidly growing 
steel and iron trade is completely rationalized. 
In the Polish metallurgical field, 14 major organ¬ 
izations are combined in one unit, the Zwiazek 
Polskich Hutzelaznych. This operates plants in 
22 Polish centers. While these are autonomous, 
a constant effort is made to concentrate produc¬ 
tion in the best equipped and best located mills, 
while the selling efforts of the whole industry is 
unified in three selling organizations, one of which 
concerns itself with sales inside Poland, and the 
other two with the world market. 

There are national organizations promoting 
rationalization in Germany, Austria, Czecho¬ 
slovakia, France, Hungary, Italy, Poland, the 
Netherlands, Rumania, Spain, Switzerland and 
Norway. Many of these organizations have 
government subsidies. In Czechoslovakia the 
Masaryk Academy of Work, an official institu- 
— 98 — 



Rationalization’s Logical Conclusion 


tion, carries on propaganda in favor of rationali¬ 
zation under six different sections. Thus, during 
the last year, it has promoted rationalization and 
standardization in medicine, pharmaceutics, the 
production of agricultural machinery, building 
operations, mechanical and electrical engineering, 
timber, textiles, and through vocational guidance 
and aptitude tests for employees, industrial work¬ 
ers and motor drivers. The Masaryk Academy is 
sending a number of young technical students to 
the United States to study industrial processes. 

An incomplete survey shows that there are 
now two European periodicals published in mul¬ 
tilingual form which are entirely devoted to the 
progress of the rationalization movement. In 
addition, there are 48 periodicals published in 
Germany, 17 in France, 2 in Spain, 1 in Hungary, 
6 in Italy, 3 in Poland, 1 in Rumania, and 2 in 
Czechoslovakia, all dealing with various phases 
of the subject. The book and bulletin literature 
which is piling up, under the impetus of the 
International Committee on Scientific Manage¬ 
ment, with its branch organizations in the states 
already mentioned, is of enormous proportions. 
National congresses are being held in practically 
— 99 — 



The United States of Europe 


all of the industrial nations of Europe, as well as the 
international gatherings which have been held at 
two-year intervals, the latest meeting in Paris this 
year. 

7. How America Has Helped 

In a sense, the rationalization movement can 
be said to head up in the International Manage¬ 
ment Institute at Geneva. This institution— 
which is known in French as the Institut Inter¬ 
national d J Organisation Scientifique du Travail 
and in German as the Internationales Ration- 
alisierungs Institut—was founded early in 1927 
by the International Labor Office, the Interna¬ 
tional Committee for Scientific Management, and 
the Twentieth Century Fund. The latter is an 
American endowment, in which such industrial 
leaders as Mr. Edward A. Filene and Mr. Henry 
S. Dennison are largely interested. 

The whole history of this organization is a 
refutation of much of the cheap talk that can be 
heard, both in America and Europe, concerning 
America’s economic ruthlessness and her refusal 
to help in solving the problems of other lands. 
It is no secret that the financial support behind 
— 100 — 



Rationalization’s Logical Conclusion 


the International Management Institute has been 
largely American. Without the active leadership 
of Americans the Institute would never have been 
founded, and several times in its history it must 
have been abandoned except for American faith 
and renewed support. Yet the whole business 
of the Institute is to put freely at the disposal of 
European industry information as to the methods 
and business philosophy under which American 
industry has achieved its unique prosperity. The 
Institute is, in other words, the intervention of 
American business in Europe to aid European 
business in becoming a sturdy competitor for 
world markets. 

The International Management Institute 
maintains in Geneva, in a chateau on the grounds 
of the International Labor Office, what amounts 
to a staff headquarters for the European ration¬ 
alization movement. Here, under the direction 
of an international staff of ten experts, material 
bearing on all phases of scientific management is 
collected and made available to European govern¬ 
ments, manufacturers, business houses, schools, 
and even labor unions. A regular bulletin service, 
in three languages, is maintained, while special 
— ioi — 



The United States of Europe 


studies of significant industrial experiments are 
also supplied to. the Institute’s subscribers. 

As I write I have before me a bulletin of the 
Institute which shows that, in the two years, 1927- 
1928, in addition to information on the progress 
of organizations fostering the rationalization 
movement, this body furnished its subscribers 
with detailed information on the following range 
of topics: rationalization in the individual en¬ 
terprise, covering such questions as personnel, 
industrial relations, industrial leadership, psycho¬ 
technology, wages, unemployment, and safety; 
rationalization in organization and equipment, 
covering such questions as lay-out, work planning, 
flow work and mass production, internal trans¬ 
port, packing, general distribution, marketing, 
credit and instalment buying, retail trade, new 
methods of distribution, including department 
stores, chain stores, rolling stores, one-price stores, 
and salesmanship and advertising; rationaliza¬ 
tion in administration, dealing with office work, 
budgetary control, and accountancy. 

Another portion of the material distributed 
during this same period fell under the head of 
economic rationalization, and had to do with 


— 102 — 



Rationalization’s Logical Conclusion 


the operation of trusts and combines, collabora¬ 
tion through management research groups, elim¬ 
ination of waste, and simplified practice and 
standardization. Still another part of the work 
of the Institute, and a much larger part, was taken 
up with informing its subscribers as to the appli¬ 
cation of rationalization to different branches of 
industry. Nineteen such branches were treated: 
agriculture and forestry; mines and quarries; 
iron and steel, engineering, metal trades, hard¬ 
ware; electrical power and light; automobiles; 
timber and wood-working; building and domes¬ 
tic economy; pottery; asphalt, oil and rubber 
trades; chemical industry; textiles; boot and 
shoe trade; foodstuffs; paper and printing trades; 
banking; insurance; transport; public adminis¬ 
tration, and handicrafts. 

Any reader with imagination will have no 
difficulty in penetrating behind the monotony of 
such a list to the enormous value of its contribu¬ 
tion to the making of a new European industrial 
life. Incidentally, reflection on the diverse ele¬ 
ments which are included will help to explain 
why it is difficult to make a simple definition of 
the content of the term “rationalization.” 

— 103 — 



The United States of Europe 


8 . What Rationalization Proves 

The story of the rationalization movement 
might be extended indefinitely. It all comes to 
this, however, that the old days of individualistic, 
rule-o’-thumb business in Europe are gone. In 
their place has come an industry that is con¬ 
sciously following the lines laid down by American 
big business. Mass production, the elimination 
of waste, standardization—these and all the other 
slogans of American large-scale industry have 
been adopted in their entirety by Europe’s in¬ 
dustrial leaders. Europe’s manufacturing plants 
are being conquered by the conveyor belt. It is 
no mere coincidence that the best known Ameri¬ 
can is Henry Ford. 

But what, it may be asked, has all this to do 
with the proposal to establish a United States of 
Europe? A little reflection will show that the 
rationalization movement proves, for one thing, 
that Europe is ready to adopt new methods. 
The power of tradition is on the decline. In the 
second place, the intense interest which all 
European governments are showing in the move¬ 
ment reflects the growing influence of business in 
government. The European state is coming more 
— 104 — 



Rationalization’s Logical Conclusion 


and more under the domination of economic in¬ 
terests. And in the third place, the thoughtful 
European business leader has to proceed only a 
little way with his rationalization processes be¬ 
fore he discovers that their complete working out 
is impossible within the artificial restrictions im¬ 
posed by present nationalistic divisions. 

Rationalization, for big business at any rate, 
requires at least a continent for its proper func¬ 
tioning. Scientific management largely goes to 
waste if products are artifically restrained within 
the narrow boundaries of the average European 
state, or if factories are artificially restricted from 
free access to their necessary materials. Cartels 
on an international scale are a beginning toward 
the surmounting of these artificial barriers, but 
they are only a beginning. Something more 
than an extension of the cartel movement is 
needed, in the view of most European business 
men, to make the entire continent prosperous. 
This something more they believe will be found 
when tested rationalization processes are applied 
to all business in a continent that knows a free 
movement of goods and complete freedom of 
trade everywhere within its boundaries. And 
that, in other words, is a United States of Europe. 

— 105 — 



CHAPTER VI 


THE OUTLOOK FOR EUROPE’S 
WORKERS 

i. The Masses and Pan-Europe 

Count coudenhove-kalergi is 

credited with having claimed, not long ago, that 
five hundred men can, if they will, bring the 
formation of a Pan-European federation to pass. 
There is a sense in which this is probably true. 
And proponents of the idea are naturally apt to 
emphasize the importance of securing converts 
from this restricted circle of influential persons, 
since by this they hope to convince a skeptical 
world that the realization of their dream is some¬ 
thing that can be attained in the immediate 
future. 

But when Count Coudenhove-Kalergi first 
introduced his idea to the world he spoke in a 
somewhat different vein. Then, in his book, 
“Pan-Europe,” he said, “While thousands be¬ 
lieve in Pan-Europe, it is a utopia; so long as 
millions believe in it, it is a program; but at 
— 106— 


The Outlook for Europe’s Workers 


once a hundred million believe in it, it becomes a 
fact.” This is the more realistic prophecy. Of 
course, a selected group of national leaders can 
produce an enormous effect if they come out in 
favor of the idea. They may even be able to 
induce parliaments to vote in favor of various 
steps in its realization. But it will require wide¬ 
spread popular support to give the movement 
that vigor and ability to survive setbacks which 
it must have if it is to be anything more than a 
passing enthusiasm. 

It cannot be too often emphasized that the 
greatest obstacle in the way of a genuine solution 
of Europe’s difficulties—whether that solution 
takes the form of a European union, or whatever 
form it may take—is the mutual suspicions and 
hatreds existing between the common people of 
the different nations. Statesmen are frequently 
accused of keeping Europe’s flames of jealousy 
and bitterness alight, and some of them are not 
guiltless of the charge. But the most evil-minded 
leader could not successfully follow a policy of 
mischief-making for long if there were not al¬ 
ready a general disposition on the part of the 
masses to think evil of their neighbors and to 
—107 — 



The United States of Europe 


wish evil to them. It is the common man’s pas¬ 
sion that makes Europe a smouldering lava-bed 
of ancient antipathies today. 

For that reason, as has already been said, 
popular support for the United States of Europe 
idea will not be enthusiastically forthcoming 
until the common man comes to realize the hope¬ 
less future which the present order fixes on him, 
and until he sees that there is material gain for 
him in a breaking down of the barriers that now 
separate him from the people of adjoining nations. 
Pan-Europe will not be assured until the common 
man demands it. He will not demand it until he 
sees that his bread and butter, his fhome and his 
clothing, his own prosperity and the future of his 
children is involved. What chance is there of con¬ 
vincing him of this? Let us look at Europe from 
the viewpoint of the workers, and see whether we 
can arrive at an answer to that question. 


2. British Labor and the Future 

Viewed from the workers’ standpoint, the 
first thing to be said about the situation in Great 
Britain is that the tight little isle has become 
— 108 — 



The Outlook for Europe’s Workers 


altogether too tight. England lived through a 
long century in relative prosperity, a reward for 
her good fortune in being the first to harness her 
industrial life to the new age of steam. But 
the great industrial lead that Britain had piled 
up during the nineteenth century was being 
rapidly whittled away throughout the opening 
decade of the twentieth, and the war wiped out 
completely what remained of it. The first 
economic fact that strikes the observer in England 
today is that there are more mouths to feed 
than British industry, as at present organized 
and functioning, can fill. Britain is overpopu¬ 
lated. 

In one sense, England came out of the war 
more devastated than any of her allies, although 
no enemy soldier ever set foot on her shores. Her 
national debt was so increased that interest 
charges went up from approximately $120,000,- 
000 the year of the war’s outbreak to almost 
$1,750,000,000 in the year when she finally 
managed to bring her currency back to the gold 
basis. Of her shipping—that vital factor in 
British economic life—she lost 9,000,000 tons. 
Many of the best of her old markets, such as 
— 109 — 



The United States of Europe 


Germany, Austria and Russia, were bankrupted. 
Others built up industries of their own during 
the war years, and meant to see that these sup¬ 
plied the needs which once had been supplied 
by Britain. Finally, two markets that she had 
once held with ease she found now to be passing 
rapidly to competitors, South America at the 
industrial invasion of the United States, and India 
and China at the invasion of Japan. 

The result was summarized by the Liberal 
party, in its report, “Britain’s Industrial Future,” 
published in 1928, in this fashion: “For the past 
seven years the condition of these industries— 
coal, iron and steel, shipbuilding, textiles—the 
chief contributors to our development during the 
nineteenth century, has been profoundly un¬ 
satisfactory, whether we have regard to the 
volume of trade and of employment, or to the 
wages and profits which they have afforded to 
those engaged in them. Moreover, while the 
outlook for some of these industries is improving, 
the difficulties of others, and among them the 
most important, namely coal and cotton, are 
becoming increasingly acute. The troubles of 
the export industries have acted as a brake on 
— no — 


The Outlook for Europe’s Workers 


our general economic progress. They render its 
continuance precarious. They have persisted 
too long to entitle us to dismiss them with facile 
expressions of hope that better days may be in 
store.” 

The extent of Britain’s unemployment prob¬ 
lem will be referred to elsewhere in this volume. 
The report of the ministry of labor for 1928 
frankly admits that for that year “the course of 
employment was, on the whole, disappointing.” 
Mining, shipbuilding, cotton, woolens and wor¬ 
steds, and boots and shoes—industries employing 
about one-fifth of the total working population, 
under the industrial insurance figures—provided 
about one-third of the unemployment. The low¬ 
est figure which the registered unemployment 
reached during the year was above the million 
mark; on December 31, 1928, Great Britain had 
1,520,730 registered as out of work. This out of 
a total working population of less than 12,000,000! 

Figures such as these, appalling as they are 
to one who reads them with any imagination, 
still fall far short of giving a picture of living 
conditions as they are in scores of British com¬ 
munities. Just about a year ago, Mr. John Gals- 


— hi — 



The United States of Europe 


worthy, the novelist, wrote a letter to the editor 
of the Manchester Guardian in which he told of 
the situation in more human terms. 

“I have recently visited a mining village, 
which shall be nameless, where two collieries are 
closed and a third wavers on the brink, so that 
some three-quarters of the miners are unem¬ 
ployed and the whole may quite possibly soon 
become so,” said Mr. Galsworthy. . . There, 
in fact, was a male population entirely dependent 
on mining, three-quarters of whom were out of 
work. And this is one of the better centers of 
unemployment, because their fate only descended 
on them six months ago. There is no evident 
distress; the children are not as yet ill nourished. 
The men are still on the ‘dole’; have just enough 
to keep the wolf from the door. When in course 
of time the dole ceases and they come on the 
rates (a vanishing quantity in such a district) 
they will still presumably not absolutely starve; 
but what a life is and will be theirs—idle, hope¬ 
less, and increasingly destitute! 

“The chief pit, mind, is closed forever, and 
the fifty years of coal that they say is still there is 
lost to the nation. I saw a good many miners of 
— 112 — 



The Outlook for Europe’s Workers 


all ages, puzzled, dejected, but with very little 
bitterness as yet, having the English power of be¬ 
lieving that something will turn up. They have 
nothing to do except report to the Labor Ex¬ 
change. They sit at home or stand about. Good 
folk, friendly, patient—from father to son at¬ 
tached to their job, attached to their homes. In 
a way those last virtues are against them; they 
hate to be uprooted—who doesn’t? They will 
not willingly even be transferred. They say they 
will go to any permanent job provided, but as 
yet they will not take chances. 

“A mining community is very much out of 
the world’s ebb and flow. It has to be, and you 
can’t easily change its mentality. In one family, 
as good people as can be met with, the father, a 
strong, sturdy, cheerful man, showed me the 
reference given him by the manager on the mine’s 
closing: twenty-eight years in the same pit, most 
of them in a responsible position. 

“ T’ve got fifteen years’ work left in me,’ he 
said, ‘but what chance have I got of another job 
at 56?’ 

“One son was just back from his job at the pit 
that is still working but probably doomed; an- 
— 113 — 



The United States of Europe 


other son, with a wife and three children, was 
out of work; a third son was out of work. There 
was no sign of bitterness in any face or voice.” 

What is the outlook for workers who find them¬ 
selves in such a position? It is generally admitted 
in England that the mining industry requires 
complete rationalization, and the present Labor 
government is putting on heavy pressure to 
bring this rationalization to pass. But such a 
process will require the elimination of probably 
at least 300,000 men from the ranks of the miners. 
This may mean, in the long run, that the remain¬ 
ing 800,000 men in the industry can look forward 
to fairly steady employment, and at fair wages. 
But it will mean, in the period of reorganization, 
a vast human displacement, with workers being 
placed on pension at 60, or perhaps even earlier; 
with thousands of other workers in the prime of 
life being transferred into other industries; and 
with thousands of young men being forced to 
emigrate to other parts of the empire or to the 
United States. 

Of course, coal mining, basic as it is to Brit¬ 
ain’s industrial life, is not the whole of it. And 
even when the distressing conditions in textiles, 
— 114 — 



The Outlook for Europe’s Workers 


shipbuilding, and to a considerable extent in steel 
and iron, are added to the story, there are other 
elements which are not without their encourage¬ 
ment to the British worker. For one thing, Britain 
retains approximately the same proportion of 
the world’s carrying trade that she held before 
the war. This in itself will provide for the sup¬ 
port of a considerable portion of her population. 
Again, there is coming to England consider¬ 
able industry of a new sort, such as the manufac¬ 
ture of motor cars, electric equipment, chemicals 
and the like. And this new industry is not con¬ 
fined to the north; it is spread over the whole 
country, and is offering the comparatively high 
money wages of the factory to thousands who dug 
their living out of the land in the past. 

At the same time, however, there is a distinct 
movement toward the land in many parts of 
England. Under the weight of taxation, big 
estates are everywhere being broken up. Dean 
Inge stigmatizes the resulting colonies of small 
holdings as “bungaloid growths,” but they rep¬ 
resent freeholds with gardens capable of con¬ 
tributing largely to the support of the owners. 
Moreover, British agriculture would seem to be on 

— “5 — 



The United States of Europe 


the verge of great advance, for with the develop¬ 
ment of electric service it will be possible for 
farms to be run on a much more modern basis, 
and to produce a much larger volume of foodstuffs 
than in the past. The prosperity of these farms 
will, in turn, provide an increasing domestic mar¬ 
ket for new farming machinery. 

View the industrial outlook as optimistically 
as you will, however, and it is still difficult to 
foresee any considerable prosperity for the British 
worker. Certainly he is hardly in sight of attain¬ 
ing those returns from his labor which he has 
been assured he may legitimately expect. Mr. 
Seebohm Rowntree, one of England’s foremost 
employers, has summarized the legitimate expec¬ 
tations of labor as: 

1. A living wage, by which is meant a wage 
large enough to enable the worker to marry, live in 
a decent house, bring up a family of normal size in 
full physical efficiency, with a reasonable mar¬ 
gin left over to care for emergencies and recreation. 

2. Reasonable hours of work, a 48-hour week 
being regarded as normal. 

3. Reasonable economic security, to be guar¬ 
anteed by means of unemployment insurance. 

— 116 — 



The Outlook for Europe’s Workers 


4. The status of a free man in a free country, 
by which it is meant that the worker shall not 
be at the mercy of his boss, but shall have direct 
representation on a works council which has 
genuine authority. 

5. Some scheme of profit-sharing by which 
workers have a direct share in the prosperity of 
the work in which they are engaged. 

With the best will in the world, both from a 
large portion of the employing group and from 
the government now in power, together with the 
aid of all the industrial aid schemes which that 
government can float, it must be admitted that 
any such future as this is still far beyond the hope 
of a majority of England’s workers. And it will 
remain there unless England’s markets are in some 
fashion expanded. 

3. What Can French Labor Expect? 

It has already been said that France has, in 
certain respects, experienced a remarkable in¬ 
dustrial revival since the war. In her former 
devastated areas she has created one of the most 
modern industrial sections in the world. She 
— 117 — 



The United States of Europe 


has new woolen, cotton and linen mills, new sugar 
plants, new iron and steel works, newly equipped 
mines and new heavy machinery plants. The 
whole region is gridironed with high-tension 
electric lines. Following the example of German 
rationalization, power stations and chemical 
plants are located at the mine mouth. 

Today France’s exports are twice what they 
were before the war. Thanks to her gains from 
the peace treaty, she has become almost self- 
sustaining in regard to fuel. Compared with 
1913, her gain in output stands at about 30 per 
cent, while that of the United States is about 20 
per cent, that of Germany 10 per cent, and that 
of Great Britain only one per cent. No wonder 
she has no unemployment problem! 

But this is not all of the French industrial 
picture. The majority of French workers are still 
peasants, engaged in agriculture. For them the 
outlook is far from roseate. Comparing the year 
before the war, 1913, with the last year for which 
agricultural statistics are available, 1927, it is dis¬ 
covered that the surface sown to wheat has di¬ 
minished by 20 per cent; that the rye crop has 
fallen off by 400,000 tons, the oat crop by 200,000. 

—118— x 



The Outlook for Europe’s Workers 


Barley, sugar and potatoes alone are at the pre¬ 
war level. 

The number of horses owned by French 
farmers has diminished by 300,000; of hogs by 
1,000,000; of sheep by 5,400,000. Vineyard 
acreage shows a decline from approximately 
3,750,000 acres in 1913 to 3,400,000 acres today. 
The high tariff policy has sent up the price of the 
machinery used by farmers much more rapidly 
than there has been an increase in the price he 
receives from his sale of foodstuffs. Such money 
as the farmers made during the war was wiped 
out when the franc was stabilized at one-fifth its 
former value. 

The country districts are constantly losing pop¬ 
ulation. The drift to the cities has now reached 
the point where only 52 per cent of France’s 
people live in towns with less than 2,000 popula¬ 
tion. Consequently, the necessity of importing 
foodstuffs is rapidly increasing. The gain in im¬ 
ports of foodstuffs and drinks over 1913 has been 
more than one-third. At the same time the food¬ 
stuff exports have fallen off by five per cent. : The 
foodstuff deficit is today 60 per cent larger than 
it was, on the average, between 1909 and 1913. 

—119 — 



The United States of Europe 


Elsewhere I have spoken of the disappearance 
of the rentier , the Frenchman living on the income 
from his investments, following the bankruptcy of 
Russia and other countries in which French in¬ 
vestments were concentrated, and following the 
stabilization of the franc. The same process 
which has eliminated the rentier has brought an 
ominous increase in the number of women in in¬ 
dustry. In 87 departments of France the number 
of women engaged in non-manual work increased 
between 1911 and 1921 by 465,000. Today, 42.3 
per cent of all adult French women are at work. 

The disaster that has befallen this same middle 
class is also shown by the drop in foreign invest¬ 
ments. Before the war these averaged about 
3,000,000,000 francs a year. In 1928 the sum in¬ 
vested abroad, in terms of the value of the 1913 
franc, was only 1,273,000,000 francs. And even 
this represented not the investment of banks or 
individual investors so much as of industrial cor¬ 
porations. 

France’s economists view the future with un¬ 
concealed concern. To them, the rapid increase 
in the agricultural deficit and the decrease which 
is now beginning to set in on the value of indus- 


— 120 — 



The Outlook for Europe’s Workers 


trial exports spell but one thing. The period of 
relative prosperity which has followed the war is 
increasingly imperiled. Unless the French manu¬ 
facturer and investor can find new markets, 
French labor faces a period of great difficulty. 
But where are these new markets? French in¬ 
dustrialists are undoubtedly thinking in terms of 
the undeveloped areas of eastern and Mediter¬ 
ranean Europe. Their interest in bringing this 
region under a free trade regime is therefore clear. 
Can they make this interest clear to their em¬ 
ployees? 

4. Italy and the Syndicalists 

From the standpoint of the worker Italy pre¬ 
sents one of the most interesting situations in 
contemporary Europe. Having come into power 
in the midst of an industrial confusion that 
bordered on anarchy, Mussolini has taken hold 
of the economic situation with a firm hand. Not 
only has the government budget been made to 
balance for the first time in sixty years, but all 
government services have been brought to new 
standards of efficiency and the whole industrial 
situation toned up. The development of hydro- 
— 121 — 



The United States of Europe 


electric power has played a large part in this. 
Italy now operates more than 80 per cent of all 
her industries with electricity, as the British miner 
has rueful cause to know. All production has been 
brought back to pre-war levels, and much of it is 
above that standard. 

The Italian industrial structure today rests on 
syndicalism. This is, of course, syndicalism of the 
fascist type. The organization of the syndicates 
is too intricate for description here. It is sufficient 
to say that practically all employers and employees 
are grouped in thirteen syndicates, which are 
again brought together in seven corporations 
representing the metallurgical industries, the 
mechanical industries, textiles, the chemical in¬ 
dustries, agriculture, commerce, and chemical 
trade. These have complete control of conditions 
within the industries they represent, working in 
accord with the officers of the fascist state. They 
also elect the members of the Italian Chamber of 
Deputies, which is thus organized on industrial 
rather than geographic lines. Needless to say, 
the fascist grand council has a determining voice 
in the selection of the candidates among whom the 
syndicalists may choose. 

— 122 — 




The Outlook for Europe’s Workers 


The rank and file of Italian workers undoubt¬ 
edly support the fascist-syndicalist regime. This 
is natural, for under this rule work has been more 
plentiful and regular. Although strikes have been 
made illegal, the machinery for hearing com¬ 
plaints of laborers has been made easy of opera¬ 
tion, and the government has stepped in in 
thousands of cases to establish new wage sched¬ 
ules. Yet the trend of wages seems to have been 
downward. Thus, in Milan, a comparison be¬ 
tween wages in January, 1927, and in January, 
1929, shows that the pay of carpenters has fallen 
from 810.89 to 89.09 a week; masons from 810.37 
to 88.71 a week; painters from 811.97 to 89.97 a 
week; cabinet makers from 810.13 to 89.86 a 
week; skilled workers in the chemical industry 
from 87.42 to 86.72 a week. Such statistics as are 
available from other parts of Italy show much the 
same falling off. 

At the same time, the workingman must soon 
come to realize that he is the foreordained victim 
of Mussolini’s policy of Italian aggrandizement. 
In the years before the war Italy was sending 
hundreds of thousands of her surplus population 
annually to America. American immigration 
— 123 — 



The United States of Europe 


laws now make that impossible. France ab¬ 
sorbed large numbers of Italians immediately 
following the war, but France is no longer eager 
to replace her war-destroyed population. Musso¬ 
lini, however, plunges ahead encouraging the 
building up of large families, placing heavy tax¬ 
ation on bachelors, and in every possible way 
increasing Italy’s already overcrowded condition. 
A population of 60,000,000 by 1950 is the avowed 
aim of the fascist government. This may be a 
logical program from the standpoint of Musso¬ 
lini’s oft-announced desire to obtain and develop 
a large colonial empire. But it spells bitter 
poverty, and perhaps future war sacrifices, for 
the Italian peasant and worker. 

Just now the eyes of the common man in 
Italy are dazzled with the visions of a glorified 
Italy painted by Mussolini’s eloquence. But 
oratory cannot forever take the place of bread. 
As the overcrowding of his country becomes more 
acute, as wages continue to slide downward as 
the surplus of man-power increases, the Italian 
worker may grow more critical of Mussolinian 
policy. He may see that his personal welfare 
depends on winning the friendship of neighboring 
— 124 — 



The Outlook for Europe’s Workers 


nations, rather than antagonizing them; on 
opening the doors to new markets, rather than 
provoking their closing. Out of that awakening, 
if it should come, a drastic change in fascist 
foreign policy might ensue. But it must be ad¬ 
mitted that this perception by the Italian worker 
of his gloomy future under present fascist policy 
is not yet in sight. 

5. Germanys Struggling Masses 

We have already told of the remarkable re¬ 
covery of German business from the war, and from 
the dislocations that followed the war. Moreover, 
the government of Germany is today largely in 
the hands of the Social Democrats, who form the 
largest bloc in the Reichstag, so that it can be 
taken for granted that the state is doing every¬ 
thing possible to lighten the burden of the worker. 
Yet the lot of the mass of German toilers is terribly 
hard. 

For Germany as a whole, the average weekly 
wage of skilled workers in February, 1929, was 52 
marks 32 pfennigs. That means, in terms of 
American money, $12.56. The average wage of 
— 125 — 



The United States of Europe 


unskilled workers was $9.73. There are a very 
few categories in which the wage of skilled work¬ 
men may go up as high as $24 a week. Printing 
is one of these. On the other hand, there are 
many groups of unskilled workers in which the 
level of pay is below $9 a week. Woman workers 
in especial frequently work for $6 a week, and 
some for even less than that. Out of a total 
working population of 4,483,600, there were 
1,702,342 workers receiving unemployment bene¬ 
fits at the close of 1928. This is an appalling 
percentage to be out of work. Of course, the fig¬ 
ures decline with the coming of occasional em¬ 
ployment in the spring and summer. But even 
in May, 1929, the latest month for which statis¬ 
tics are available, the unemployed in Germany 
still numbered 1,400,000! 

Of course, there is unemployment insurance. 
To this the German worker clings desperately, and 
naturally so in view of the number constantly 
out of work. But the manufacturer, who must 
contribute heavily to the insurance treasury, is 
increasingly bitter in his complaint. It is not at 
all impossible that the insurance issue may be¬ 
come the most heated one in Germany’s internal 
—126 — 



The Outlook for Europe’s Workers 


politics within the next year or two. Without 
going into the intricacies of the system, it can be 
said that the highest insurance a maximum-wage 
skilled worker can receive, including the allow¬ 
ances for any number of children he may have, is 
$9.07 a week, with a limit of 26 weeks. If the 
worker needs help beyond that, he must appeal to 
the philanthropic schemes of local municipalities. 

While wages are thus low, house rents are high. 
A two-room apartment in a house built since the 
war will rent for between $16 and $22 a month. 
This is quite beyond the resources of an unskilled 
worker, as well as beyond that of the majority of 
skilled workers. This means that the worker 
must wait, before marrying, to obtain an apart¬ 
ment in one of the pre-war houses, where rents are 
held down by government decree. Since these 
apartments are jealously guarded by their occu¬ 
pants, the German worker may have to wait for 
anywhere from five to eight years before he can 
marry—a situation that is bound in time to have 
a devastating effect on community morale. 

Wages are slowly going up in Germany, low as 
they still are. And German workers have greater 
opportunities to rise in the social scale than they 
— 127 — 



The United States of Europe 


had before the war. But conditions are still any¬ 
thing but easy for the German worker. The ne¬ 
cessity of working under high pressure in order to 
increase the export totals, and thus meet the repa¬ 
ration demands, does not make the outlook a 
comfortable one. So far, reparation payments 
have been made from Germany’s foreign borrow¬ 
ings. But there is an end to this possibility; many 
believe this end to be already in sight. The day 
will come when the interest charges on the bor¬ 
rowings will have reached a figure as heavy as 
that of the reparation demands. The burden that 
German industry will then have to shoulder is 
staggering to contemplate. It will be the German 
worker who will suffer most under the resulting 
pressure. No wonder, therefore, that Social Dem¬ 
ocrats are as much interested as bankers in any 
United States of Europe plan which holds out a 
promise of a wider outlet for German products. 

6 . Workers in the New States 

Considerations of space force me to pass over 
without comment the condition and outlook for 
labor in Scandinavia, the Baltic states, and Russia. 

— 128 — 


The Outlook for Europe’s Workers 


And I can only give a passing reference to the po¬ 
sition in which the worker finds himself in the 
nations of central, eastern and southeastern 
Europe. 

The precarious economic condition of Austria 
is generally known. By the terms of peace im¬ 
posed on her, Austria consists of a city of 2,000,000 
designed to serve as the capital of an empire of 
30,000,000 people, but now the capital of a state 
containing only 6,500,000. Moreover, the Aus¬ 
trian hinterland is mountainous, and is hardly 
able to do more than sustain the lives of those who 
live on it, let alone a city like Vienna. The re¬ 
sult is that Austria, without coal, without food¬ 
stuffs, without an export trade of any consequence, 
is almost totally dependent on other countries 
for sustenance. And since these countries are, to a 
large degree, former parts of the Hapsburg empire, 
still nursing the remembrance of wrongs suffered 
under that regime, it is not easy for the little state 
to reach a basis of economic stability. Indeed, 
the problem of bread and butter is still a bitter 
one for a large part of Austria’s population. This 
contributes directly to the political unrest which 
characterizes the country. 

— 129 — 



The United States of Europe 


Hungary has been so absorbed in the political 
questions growing out of her loss of territory under 
the Treaty of Trianon that she has hardly per¬ 
ceived the economic difficulties which beset her. 
But Hungary remains almost feudal in her social 
structure, with great landlords holding the bulk 
of her peasants as tenants on their estates. What 
commerce there is in Hungary is in the hands of 
Jews, Germans and Austrians. Some day—and 
that before long—these exploited peasants on the 
estates will begin to compare their position with 
that of the workers in Czechoslovakia and Poland. 
When they do, there will be less agitation about 
boundaries and more about property holdings. 
Hungary had a bitter experience with commu¬ 
nism. This has had much to do with making the 
Magyar masses willing to accept the reactionary 
social policies of the Horthy regime. But the 
period of virtual serfdom cannot, and will not, 
last forever. 

Of all the Austrian succession states, Czecho¬ 
slovakia is in the best position from an economic 
standpoint. To begin with, the peace treaty 
made her the possessor of the most valuable 
portions of the old Austro-Hungarian empire. 

— 130 — 



The Outlook for Europe’s Workers 


Within her borders Czechoslovakia now holds al¬ 
most 80 per cent of all the industries which for¬ 
merly supported the commercial life of the 
Hapsburg realm. In addition, the new state has 
been given by far the wisest leadership of any of 
the nations carved out of the former dual mon¬ 
archy. She has therefore been able to take ad¬ 
vantage of the economic opportunity presented by 
the possession of industrial plants far beyond her 
own needs. The result has been a rapid building 
up of foreign trade—a condition that is reflected 
in the general prosperity which everywhere im¬ 
presses the observer in Czechoslovakia. Given a 
European situation approximately the same as 
that which obtains today, and the common man 
in Czechoslovakia can regard the future with more 
complacency than his brother anywhere else in 
central or eastern Europe. Yet it is characteristic 
of the wisdom that has already marked Czech 
leadership that this state, which is already in good 
condition economically, is one of the strongest 
supporters of the proposal for a general European 
customs union. 

While Poland has shown marked economic 
gains in the past year or so, conditions surround- 

—131 — 



The United States of Europe 


ing the life of her masses are still in striking con¬ 
trast with those in Czechoslovakia. The intense 
nationalism of Poland, which led her into her war 
on Russia in 1920, and which has involved her in a 
succession of quarrels with all her neighbors, has 
made it necessary for her to keep her army at a 
high level and to impose a terrific tax burden 
on her people. American advice and financial 
assistance has helped the Polish government out 
of the financial difficulties which once made 
bankruptcy seem certain. There has also been 
a large American interest in the development 
of the enormously valuable mining region which 
Poland took over from Germany in Upper Si¬ 
lesia, and in the extensive building operations 
which have been carried on in Warsaw, and 
in the new Polish port on the Baltic, Gdingen. 
But Polish wages, despite an ambitious social in¬ 
surance program, remain low. The best paid 
miners in the highly developed Upper Silesian 
mines receive only $1.14 a day. That is maxi¬ 
mum; minimum for what government reports call 
“young persons” goes down to 16 cents. Miners 
in the zinc mines, which are largely American- 
owned, are paid 87 cents a day. Cotton weavers 
— 132 — 



The Outlook for Europe’s Workers 


receive 82 cents; ’ carpenters and artisans about 67 
cents in a city like Posen and 96 cents in the capi¬ 
tal, Warsaw. The farmer has a struggle to obtain 
enough to live on, although the government has 
done much to make it possible for him to become 
an independent freeholder at low cost. 

In the Balkan states the outlook for the com¬ 
mon man is even more discouraging. Not only is 
the political instability of these states reflected in 
their large armaments—except in the case of Bul¬ 
garia, disarmed under the peace treaty—but the 
economic policy has, in almost every instance, 
been one of encouraging the establishment of home 
industries by the raising of tariff barriers, which 
really has served to keep the cost of products 
to the consumer at a maximum. Even in Ru¬ 
mania, where the agrarian party has won con¬ 
spicuous successes, breaking the great estates up 
into small freeholds, the man on the farm is any¬ 
thing but prosperous. Wages for male farm 
workers nowhere go above 55 cents a day; fre¬ 
quently they are as low as 37 cents. Women, who 
do a large part of the farming of the country, re¬ 
ceive from 24 to 43 cents a day, depending on the 
section. The most highly skilled factory workers 
— 133 — 



The United States of Europe 


receive up to 18 cents an hour. Conditions are 
rather better in Rumania than in the other Balkan 
states. 


7. What Can the Workers Expect? 

This hurried survey of the economic situation 
in Europe—a survey which has not so much as 
mentioned the conditions in countries like Bel¬ 
gium, Holland, Spain, Portugal, Denmark, Nor¬ 
way, Sweden, the Baltic republics, Russia, 
Jugoslavia, Bulgaria and Greece—is intended to 
make two or three simple facts clear. It is in¬ 
tended to make it clear, for one thing, that labor 
is obtaining a new power throughout post-war 
Europe. This ranges all the way from the avowed 
proletarianism of Russia, and from the new 
agrarian policies of the backward states of the 
Balkans, to the presence of a Labor government in 
Great Britain. Just what the development of 
Europe will be during the next fifty or a hundred 
years no man is wise enough to forecast. But it is 
plain that the workingman now has enough 
power, if he can learn how to use it, to make that 
development accord with his wishes in every part 
of the continent. 


134 — 



The Outlook for Europe’s Workers 


But in the second place, it should be realized 
that, whatever the power which labor possesses, 
the mass of Europe’s people still live in poverty. 
The farmers of a dozen countries, who were no 
more than chattels on great estates a dozen years 
ago, may be landed proprietors today. The 
factory workers may have forced parliaments to 
enact far-reaching social insurance programs. 
But all alike still live on the narrowest of subsist¬ 
ence margins, and all alike know a future that is 
filled with anxiety and the threat of hunger. 

I think that unprejudiced examination will 
show, in the third place, that European industry 
cannot provide a higher standard of living for 
most of the people of Europe as long as it is orga¬ 
nized on the present basis. As long as markets 
are artificially restricted by almost impassable 
trade barriers between the separate states, as long 
as the conception of economic relations is one of 
unremitting warfare, it is impossible for the 
worker, whether in factory or on the farm, to se¬ 
cure more than a hand-to-mouth living. 

The only worker in Europe who can face the 
future with enthusiastic hope is the worker in 
Russia. To be sure, the lot of the Russian worker 
— 135 — 



The United States of Europe 


at present is as hard as that of most of the workers 
in other European states. In some cases, it is, 
harder. He still works at low pay; he still must 
be satisfied with a bare subsistence. But he is not 
dogged with the same doubts, he does not rest 
under the same load of discouragement that is 
characteristic of labor elsewhere in Europe. He 
believes that the day is coming when matters will 
work out so that he will be able to live what he 
considers to be a fully satisfactory life. And the 
reason is that Russia, even if cut off from other 
states, can provide a free trade area large enough 
within itself to offer Russian industries all the 
markets they will need. In that respect, the ex¬ 
ample of Russia is like the example of America. 

Sooner or later, I believe, the masses of the 
rest of Europe are going to awaken to this need 
for free markets many times the size of those 
now open to them. Far-sighted industrialists al¬ 
ready perceive this need, and their support of the 
Pan-European movement is the result. But when 
the masses come to see it, the ancient hatreds and 
prejudices which now hold the 27 states of 
Europe apart will soon be discarded. There will 
come then a recognition of the community of 
— 136 — 



The Outlook for Europe’s Workers 


interest of the workingmen in every part of the 
continent. And when that comes, the establish¬ 
ment of a true and lasting United States of 
Europe will not be far behind. 


— T 37 — 



CHAPTER VII 


THE AMERICAN INFLUENCE 
i. Where the Idea Comes From 

If anybody still doubts the world influence of 
the United States, the movement for the estab¬ 
lishment of a United States of Europe should dis¬ 
pel his doubts completely. For not only is the 
slogan, “A United States of Europe,” obviously 
inspired by the prestige of the American republic, 
but the main ideas which this slogan advances 
are ideas which have the American hall-mark all 
over them. Several years ago, speaking of the 
economic unification of Europe, Sisley Huddle¬ 
ston said that the United States “has supplied and 
is supplying the cement.” If that was true then, 
it is even more true today. 

Many European leaders who are today sup¬ 
porting the United States of Europe idea admit 
privately, although they may not think it wise to 
do so in public, that they have been greatly in¬ 
fluenced in their thinking by the American 
example. M. Briand has said, in several private 
— 138 — 


The American Influence 


conversations, that it was impressions gained 
during a visit to the United States that first 
opened his mind to the possibilities of a Pan- 
European union. Herr Loebe, president of the 
Reichstag, when speaking at the first congress 
of the Pan-European Union, testified that his 
adherence was a result of his travels on the other 
side of the Atlantic. 

Even where the original source of interest 
in the idea may be in doubt, a short study of 
speeches and articles favoring the formation of 
a United States of Europe will find them, in al¬ 
most every instance, appealing to the American 
example. “Pan-Europe,” Count Coudenhove- 
Kalergi’s book that marked the formal launch¬ 
ing of this movement, bristles with references to 
American conditions and practices. Practically 
every speech before the League Assembly which 
referred to the United States of Europe proposal 
spoke in some fashion of the American union of 
states. America may be unpopular in certain 
European quarters—and she undoubtedly is, al¬ 
though not as unpopular as some unscrupulous 
elements in the press would try to make out— 
but she is also envied. The war-harassed states 
— 139 — 



The United States of Europe 


of Europe look at her security and power with 
longing eyes. It is that same security and power 
which they seek when they talk of forming a new 
United States within the boundaries of the old 
world. 

If a United States of Europe should be 
formed during the present generation, the United 
States of America will be able to take the princi¬ 
pal credit for its formation. The idea that it 
would be a wise move for the different states of 
Europe to sink their quarrels in such a federation 
as would enable them to present a united front 
to the rest of the world would have remained an 
academic idea, without hope of being translated 
into action, but for two factors. The first of 
these factors is the American economic threat. 
And the second is the American economic ex¬ 
ample. 

2. The American Threat 

The American economic threat is seldom ab¬ 
sent from the mind of the European business man. 
In an article in the Neue Zuricher Zeitung last 
May, Edouard Herriot, leader of the French 
radicals, after prophesying the coming of some 
—140 — 


The American Influence 


sort of European federation, exclaimed, “We 
must choose between European solidarity and 
American vassalism.” This belief that Euro¬ 
pean business is in danger of being swallowed 
wholesale is characteristic of large sections of 
continental thought. To an American, it does 
not seem to be a well-founded fear. But this does 
not change the fact that it exists everywhere in 
Europe, and has just as much influence as though 
it were well-founded. 

Thousands of European business men look at 
the present economic situation obtaining be¬ 
tween their states and the United States in much 
this fashion: Across the Atlantic lies a commer¬ 
cial El Dorado in which the business man can 
operate in a continental market knowing that no 
competitor can enjoy an advantage over him. 
This makes possible methods of standardization 
and mass production which are impossible to 
those who have a similar security only in a much 
more limited market. Therefore, the American 
business man can export to the world market 
with an advantage over all his competitors. 

But at the same time that this condition exists, 
the United States not only maintains one of the 
—141 — 



The United States of Europe 


highest tariff walls in the world, but gives every 
indication of intending to build it higher. Fig¬ 
ures quoted by Senator Borah in the debate on 
the tariff bill pending before congress in 1929 
showed that only 3 per cent of all the goods in 
the American market entered from abroad. 
There is, in other words, a virtual embargo al¬ 
ready in existence, and the American business 
man is doing what he can to make this embargo 
on foreign importations absolute. 

Then on top of all this, the United States is 
one of the two largest creditor nations; it is by 
far the largest creditor so far as public debts are 
concerned. The greater part of Europe must 
work for generations to pay what are, ultimately, 
American claims. But the tariff policy of the 
United States puts that country in the position 
of refusing to accept the goods which represent 
the only commodity in which the European na¬ 
tions can pay. The United States thus has more 
exports than imports, and at the same time de¬ 
mands large cash payments in respect of debts. 
The only possible outcome, says the European, 
is an increase of the American capital investment, 
in one form or another, in other countries. In 
—142 — 


The American Influence 


other words, Uncle Sam will establish a financial 
stake that may finally amount to economic control 
in European countries. And that, in the new era 
of world relations, will be practically equivalent 
to political domination. 

There are European economists who try to 
calm the fears raised by such an interpretation of 
the present situation. They admit that American 
industrial progress may injure certain European 
industries, such as the manufacturing of motor 
cars. But they insist that the building up of a 
large American stake in European industry does 
not diminish European prosperity in terms of the 
total goods and wages available to Europe’s 
people. On the contrary, it increases European 
prosperity in this absolute sense. And the in¬ 
vestment of American capital in European enter¬ 
prises has many advantages for those enterprises, 
while its dangers are being greatly exaggerated. 

But the voice of the objective economist pre¬ 
vails only a little against the fear of the European 
business man, who trembles lest it be his business 
that is next to fall before the conquering advance 
of American industry. Therefore it has come to 
pass that the chief topic of conversation in certain 
— 143 — 



The United States of Europe 


European business circles is as to how European 
business can compete with American. And much 
of the emotion which today catches up and 
carries forward the United States of Europe 
movement is this emotion, arising out of fear, 
which demands some method of organizing 
against the American invasion. 


3. Is Europe's Back to the Wall? 

Until this fear of American business is realized, 
the passionate nature of the European protest 
against recent proposed high increases in Ameri¬ 
can tariff duties can hardly be comprehended. 
It has been stated in the United States that these 
protests have not been of an unusual nature; 
indeed, that they have not been protests, in the 
technical sense, at all. As regards the formal 
representations made to the State Department, 
this is undoubtedly the case. But any American 
who was in Europe during the summer of 1929 
knows that the feeling in business circles concern¬ 
ing the tariff bill as it was proposed by the House 
of Representatives was surcharged with emotion. 
What is the trouble? Why should it make so 
— 144 — 


The American Influence 


much difference to a European nation that is 
trying to protect its home market from foreign 
entrance by the erection of high tariff walls if the 
United States does the same thing? 

The answer is that the European, like other 
men, is more under the influence of his emotions 
than of his logic. He sees ahead a terrific com¬ 
mercial struggle for world markets. On the out¬ 
come of this struggle he believes the prosperity 
of his country to depend, for there are no Euro¬ 
pean states left that can wrest prosperity out of 
their local markets. In this struggle for world 
markets, he fears the American as his keenest 
competitor. On the basis of a clear field with no 
favors he is quite ready to enter the contest. 
But he interprets the new boosting of America’s 
already high tariff walls as a move to give Ameri¬ 
can business such an absolute monopolistic control 
of its rich home market that it can afford to dump 
its goods into foreign markets at ruinous rates un¬ 
til it has those markets, too, in its possession. 

The European is also frankly frightened by 
the increasing American control of credit. It 
seems to him that the United States now possesses 
most of the money in the world, and that its finan- 
— 145 — 


The United States of Europe 


cial resources are increasing so rapidly that ulti¬ 
mately all the principal business enterprises of the 
world will be American-owned. Reports in the 
American press of the purchase by American 
interests of a controlling share in automobile 
works in France, Germany and Italy, or of zinc 
mines in Poland, or of shoe factories in Czecho¬ 
slovakia, may add to an American’s pride in 
the commercial expansion of his country. But 
they also add to the fear of the European busi¬ 
ness man that his turn will come, and that he 
will one day be forced by the American indus¬ 
trial conqueror either to sell out or to go to the 
wall. 

The European business man feels that he has 
his back to the wall right now. With this colossus 
of American economic power towering over him, 
how can he fight? It may be that, by protective 
tariffs, he can hold his own restricted national 
market. But what chance has he to secure any 
important part of the world market in competi¬ 
tion with this giant? It is when he asks himself 
this question that the American example arises to 
appeal to the European business man as much as 
the American threat has frightened him. The 
—146 — 



The American Influence 


American threat has made him ready to admit 
that, for his economic salvation, something must 
be done. The American example tells him what 
that something is. 


4. The American Example 

In a previous chapter I told of the transfor¬ 
mation of European business which is coming 
through the application of methods of rationali¬ 
zation. Rationalization, as I said, is one of the 
current passwords in Europe. It is hard to de¬ 
fine, but in the main it connotes about what the 
American business man has in mind when he 
speaks of scientific management. This rationali¬ 
zation movement is nothing less than the attempt 
of European business to discover the methods 
that have made American firms successful, and 
to apply those same methods. 

So much is rationalization an indication of 
the American influence that, in its early stages at 
least, it was frequently spoken of as the Ameri¬ 
canization of European industry. And even 
though that term, for obvious diplomatic reasons, 
has been dropped, it is true that in France the 
— 147 — 



The United States of Europe 


process is still called by the name of the American 
father of the scientific management movement, 
Mr. Frederick W. Taylor. It gives an American 
something of a start, when prowling through a 
technical French work like “La Revue des Trans¬ 
ports” to come on an article entitled, “La Taylor- 
isation dans les Chemins de Fer Frangais.” The 
verb, to taylorize, seems bound to become an 
established part of Europe’s industrial vocabulary. 

But the European industrialist does not need 
to delve very far into his study of American mass 
production methods before he discovers that the 
success of the American business man is not 
merely a matter of applying the best technolog¬ 
ical and administrative methods. The American 
business man is himself the first to tell him that 
the basis of his prosperity is not his factory and 
selling organization but the enormous “free 
trade” area inside which he carries on his opera¬ 
tions. I have already quoted the manifesto 
which Mr. J. P. Morgan and other American 
bankers signed in 1926, adjuring Europe to get 
rid of her internal trade barriers. That note has 
never ceased to sound. At the convention of the 
International Advertising Association held in 
— 148 — 


The American Influence 


Berlin last summer, Mr. Edward A. Filene of 
Boston gave it vigorous expression. 

“Looked upon as an economic unit rather 
than a group of nations each encased in trade 
insulators, 55 said Mr. Filene, “Europe presents 
market possibilities fully as vast as the United 
States. Consider where the United States would 
be today if each of the 48 states were separate 
nations, each 'protected 5 by its own tariff walls 
from trade with all the rest. 55 Mr. Filene’s 
words carry the greater weight in Europe because 
of his position as one of the founders and direct¬ 
ors of the International Management Institute, 
which in a sense, as I have pointed out, heads 
up the rationalization movement for the whole 
continent. 

The International Chamber of Commerce, in 
which the American influence is very strong, is 
also sure to strike this note whenever opportunity 
offers. “A European trade league would have 
open markets on at least the same scale as those 
of the United States, 55 said Mr. Walter Leaf, 
when president of that body, “and would thus 
be able to compete in production on equal terms 
with that vast area of free trade intercourse. 55 
— H9 — 



The United States of Europe 


And the formal actions of the chamber hold that 
“substantially similar freedom of commerce and 
trade in Europe (as in the United States) would 
inevitably result in great benefit to the European 
peoples.” 

5. American Free Trade 

It will probably come as a shock to most 
Americans to find their country spoken of as a 
free trade area. Yet, to the European who has 
to do with the 27 separated and protected trade 
areas of his continent, the situation in the United 
States seems almost too good to be true. To be 
able to go anywhere within that vast area, either 
to obtain materials or to deliver goods, and never 
have to prepare papers for the crossing of a single 
boundary, never have to trans-ship from cars of 
one guage or of one nationality to those of an¬ 
other, never have to pay a customs duty—this 
seems to the European to constitute a virtual 
Elysium for any manufacturer. 

Here, in the freedom of movement within the 
wide ranges of the continental United States, 
European industrialists find the underlying reason 
for American prosperity and industrial power. 

— 150 — 



The American Influence 


And for that reason, while they eagerly follow 
the American example in applying efficiency 
measures to their production processes, they seek 
also to be able to follow the American example 
in the economic organization of their continent. 
The United States of Europe is not only a slogan. 
In a real sense, it expresses exactly what an im¬ 
portant section of European business is seeking. 

It is not any particular form of political organ¬ 
ization that is involved. M. Briand speaks of a 
“federal link,” but the link may bind together 
republics and monarchies without discrimination. 
What these European industrialists have in mind 
is some method whereby continental Europe 
would be organized as the same sort of economic 
unit that the United States of America is. It 
would have the same wide stretch of territory, 
containing the same rich stores of raw materials 
and the same thickly populated markets. Inside 
this territory there would be exactly the same 
freedom of commercial activity as in the American 
federal republic. And around the outside edge 
there would be the same high protective tariff 
that America has found of such importance in 
warding off competition from abroad. 

—151 — 



The United States of Europe 


6. Is Pan-Europe Anti-American? 

The present popularity of the United States 
of Europe idea grows out of the fear and the 
example of America. Is it directed against 
America? European leaders, whether politicians 
or industrialists, will answer that question with a 
decided negative. M. Briand’s disclaimer, as 
contained in the foreword to this volume, is 
specific. But there is still enough danger of this 
interpretation of the proposal to make its sponsors 
exceedingly sensitive on the subject. 

I have not had a more amusing experience in 
a long time than I had at the Quai d’Orsay when 
I asked one of the under-secretaries for foreign 
affairs, immediately after M. Briand’s announce¬ 
ment of his intention of raising the question at 
the 1929 session of the Assembly of the League of 
Nations, if that was to be regarded as a move 
directed against the United States. The out¬ 
raged under-secretary seemed to find it difficult 
to discover air enough and waving hands enough 
with which to protest against such an idea. 

Of course, he was fully justified in his protes¬ 
tation. It would be altogether a mistake to re- 

— 152 — 


The American Influence 


gard the formation of a United States of Europe 
as a union directed against the United States. 
If it comes to pass it will undoubtedly provide the 
United States with a much more powerful com¬ 
mercial competitor. But such competition Amer¬ 
ica should welcome. In free and fair struggle 
with honorable competitors, America has noth¬ 
ing to fear. The stronger the competitor, the 
more sure America will be to keep her own 
economic machine functioning at maximum effi¬ 
ciency. And the success of a European federa¬ 
tion, bringing prosperity to Europe’s workers, 
might offer American business additions to a 
market that is now sadly circumscribed by 
poverty. 

But as a matter of fact, while it is true that 
the formation of a United States of Europe will 
not be against the United States of America, it 
is also true that, except under the stimulus of 
American economic growth the movement would 
never have attained its present importance. It 
is, as was said earlier in this chapter, the desire to 
form a combination of states which can support 
a strong competition with American business, 
that gives drive to the Pan-European agitation. 
-153 — 



The United States of Europe 


In that sense, the United States of Europe idea 
is anti-American. 

There are abundant factors, as I shall show, 
working against the proposal to bring Europe 
together. The main reason why, despite these 
factors, men now talk as though a European 
union might soon be brought to pass, is simply 
because they have become convinced that this is 
the only way by which they can escape from 
ultimate subjugation by the advancing army of 
American industry. In this sense, if there is a 
United States of Europe tomorrow, America can 
certainly claim credit for its birth. 


— 154 — 



CHAPTER VIII 


PROBLEMS FOR THE U. S. E. 

TO SOLVE 

i. The Heritage of Versailles 

/ T[hE principal influence supporting the forma¬ 
tion of a United States of Europe is industrial. 
It is the idea of some sort of customs union, 
giving business a free continent within which to 
develop, that has taken hold of the imagination 
of the European business man and made him the 
chief champion of this movement. But it is not 
only as an economic factor that many European 
leaders find importance in the proposal. They 
hope that a United States of Europe will, if 
formed, prove equally helpful in solving a large 
number of the political and social problems that 
now appear insoluble. 

More experts were employed in drafting the 
treaty of Versailles than have ever participated 
in any similar undertaking. Each of the prin¬ 
cipal negotiating delegations came to that con¬ 
ference accompanied by—one is tempted to say 
— *55 


The United States of Europe 


surrounded with—expert advisers on every pos¬ 
sible question that could arise. In most cases 
these men did their work with an honest desire 
to see a treaty drafted that would be generally 
accepted as just, and that would stand without 
serious modification as a permanent basis for a 
peaceful Europe. 

Yet the treaty of Versailles, it is now gener¬ 
ally admitted, has opened new and festering 
wounds all over the body of Europe. Despite 
the reams of arguments with which the experts 
bolstered up their advice, it is evident that many 
of the solutions of the treaty were not real solu¬ 
tions at all, but at the best only postponements 
of issues that will have some day to be faced. 
And during the period of postponement these 
questions are growing increasingly tense. 

It is not the purpose of this chapter to give 
in any detail a survey of the unsolved political 
problems which plague Europe today, ten years 
after the signing of the treaty of Versailles. But 
a hasty glance at two or three of the most impor¬ 
tant of them may help to show another direction 
in which the breaking down of the nationalistic 
divisions of the continent would help toward a 
— 156 — 



Problems for the U. S. E. to Solve 


solution. For in every case sober European 
thought admits that unless some solution is 
found these problems will eventually become too 
difficult for peaceful handling. 


2. Unsettled Boundaries 

There is, first of all, the problem of bound¬ 
aries. The peace conference in 1919 did its 
best to draw the boundaries of Europe in accord 
with historical and ethnographical facts. Yet it 
had to adjourn leaving some of these tangled 
questions for a council of ambassadors or for the 
League of Nations to settle. And many of the 
decisions it made have been, and still are, fiercely 
attacked. It is hardly over-sensational to say 
that Eurbpe is today divided into two groups: 
one holding that the boundary decisions of 1919 
are sacred and must never be altered; the other 
holding that unless they are altered the continent 
can never regain a settled peace. Indeed, Count 
Coudenhove-Kalergi has declared recently that 
unless a United States of Europe is formed, that 
continent will ultimately divide into two warring 
camps, each holding one of these two positions. 
— 157 — 




The United States of Europe 


Many Americans do not realize that there 
are still two boundaries in Europe which have 
not been accepted by the states involved. One 
is the boundary between Poland and Lithuania, 
and the other that between Russia and Rumania. 
The dispute between Poland and Lithuania, 
growing out of the Polish seizure of Vilna and 
its later confirmation in possession of that city by 
the League, has several times flamed danger¬ 
ously close to actual war. Year after year the 
Lithuanian complaint against Poland has dis¬ 
rupted the proceedings of the Council of the 
League. And while it has now been agreed on 
both sides that there will be no going to war over 
the issue, Lithuania still insists that it will not 
recognize the award as final. 

The disposition of Bessarabia is in somewhat 
similar state. Russia refuses to recognize the 
Rumanian control as final. On the other hand, 
both Russia and Rumania say that they will not 
go to war over the matter. And since Russia has 
every interest in remaining at peace, at least for 
another half dozen years or more, while it would 
be suicidal for Rumania to attack her gigantic 
neighbor—nor would there be any sense in such 
— 158 — 



Problems for the U. S. E. to Solve 


an attack, since she is now in possession of the 
disputed territory—the chances are that the Bes¬ 
sarabian question will not come to an open con¬ 
flict, at least in the near future. 

Go down into the Balkans and you find 
border difficulties more intense than before the 
World war. For various reasons, Turkey, Greece 
and Rumania are content at present to leave the 
Balkan situation as it is. But Bulgaria and Jugo¬ 
slavia seem to be involved in a never-ending 
quarrel that may precipitate a crisis at almost 
any time. The bone of contention is Macedonia. 
The trouble over Macedonia goes back to the 
war with Turkey in 1912. At that time, by the 
terms of a prior treaty, Bulgaria was supposed to 
get Macedonia as spoil of war. Serbia actually 
got the disputed province. During the World 
war Bulgaria, associating herself with the Central 
Powers, won Macedonia back, and held it for 
three years. Now Jugo-Slavia holds it again, and 
Bulgaria nurses its wrongs. 

Come up into central Europe and you have 
the unconcealed bitterness of Austria and Hun¬ 
gary over their present territorial status. Hun¬ 
gary has one of the most active propaganda 
— 159 — 




The United States of Europe 


departments in Europe, which never ceases to 
ring the changes on the “crime” of the treaty of 
Trianon, by which huge slices of what was once 
Hungary were handed over to the succession 
states of the Little Entente. The Little Entente 
is, in fact, nothing more than a combination of 
the states that profited by the slicing up of 
Hungary to see that Hungary is not tempted to 
embark on any adventures for the “rectification” 
of her frontiers. 

In Austria, the claim is generally made that 
present frontiers are impossible from an economic 
point of view. No nation, it is claimed, can 
prosper when it consists of nothing but a great 
city of two million population supported by a 
mountainous and poverty-ridden hinterland sup¬ 
porting only four million people. It is in view of 
this situation that so many Austrians hold there 
must be reunion between Austria and Germany. 
But this reunion is bitterly opposed by practically 
all the dominant states of the continent. Yet 
events are constantly transpiring to show how 
far from stability is the Austrian government. 

Probably the most mischievous boundary ques¬ 
tion in Europe is that of the Polish corridor. The 
—160 — 


Problems for the U. S. E. to Solve 


makers of the treaty of Versailles were convinced 
that Poland should be given access to the sea. 
They discovered, moreover, that a large portion 
of the population in this particular part of Ger¬ 
many was Polish. They therefore carved out the 
corridor, which puts a huge slice of Poland squarely 
athwart Germany, cutting off east Prussia from 
the rest of the reich. Again, there is a formal 
agreement, in the Locarno pacts, between Ger¬ 
many and Poland never to seek the solution of 
this question by war. But the question itself will 
not down. It has become an obsession with a 
large part of the German public. On the other 
hand Poland, having what she wants, will hardly 
agree to any negotiations looking toward a 
change in the present status. 

Other boundary problems might be men¬ 
tioned, but these will be quite enough to show 
the extent to which Europe’s political outlook is 
darkened by issues of this sort. The longer 
European statesmen consider these problems, the 
more difficult does their solution, under the pres¬ 
ent system of divided and exclusive nationalities, 
seem. But what if M. Briand’s “federal link” can 
be forged? What if these quarreling states can 
—161 — 



The United States of Europe 


be brought together in a union in which their 
community of interest will be clear? Will it not 
then be much easier to readjust these boundary 
matters, since boundaries as between the states 
within the federation will then be of minor im¬ 
portance? Many European political leaders be¬ 
lieve that this will be the case. That is another 
reason why they work for the coming of a United 
States of Europe. 


3. Minorities 

Or take the question of the minorities. Here 
is another problem, somewhat similar to that of 
boundaries, and equally far from solution under 
present conditions. Try as they might, the 
makers of the treaties of Versailles and Trianon 
could not draw the political boundaries of Europe 
so as to include all the racial groups within their 
own natural states. And if the political bound¬ 
aries were to be redrawn today, it would still be 
inevitable that, when the task was done, there 
would be groups of Germans, Poles, Magyars, 
Bohemians, and a dozen other nationalities left 
outside the limits of their homeland. 

—162 — 



Problems for the U. S. E. to Solve 


It was the intention of the nations that drew 
up the treaty of Versailles to cast such protection 
around the minorities which they were forced to 
include in the new states created after the war 
that, no matter how nationalistic the new gov¬ 
ernments might prove to be, the minority people 
would still be able to maintain their cultural life. 
The obligations which these new countries ac¬ 
cepted are well illustrated by the case of Poland. 

Poland agreed that, if members of the minor¬ 
ities within her territory had been born there, 
they should have the right to become Polish 
citizens on exactly the same terms as native 
Poles. In case they did not wish to become 
citizens, they were to emigrate to other countries. 
Life, property, and the free exercise of religion 
were to be inviolate. Equal civil and political 
rights with Poles were guaranteed. The use of 
the minority languages was protected, not only 
in ordinary business affairs, but in schools, 
churches and courts. Schools were to be pro¬ 
vided for districts inhabited largely by the mi¬ 
nority peoples in which instruction should be in 
the minority language. Such schools were to be 
supported from public funds. In case of viola- 
— 163 — 


The United States of Europe 


tion of these obligations, the minority was given 
the right of appeal to the League of Nations. 

The attempt to enforce these provisions, in 
Poland and in other nations, has met with al¬ 
most continuous opposition from nationalistic 
groups. Indeed, in some countries the nation¬ 
alists have gone so far as to advocate cancellation 
of the treaties protecting minorities entirely. 
The situation has been aggravated by the fact 
that Italy, not having been formed after the war 
and being one of the principal powers at the 
time of the peace conference, was not forced to 
give the same guarantees that were exacted from 
the other states. 

While there has been an apparent attempt, 
on the part of Poland, Jugo-Slavia and one or 
two other states, to improve conditions for their 
minorities in recent months, the question is still 
one with great power for evil. It has not been 
surprising, therefore, to see it assume, under 
German pressure, more and more importance at 
the sessions of the League of Nations. 

One of the interesting political incidents of 
1929 in Europe was the publication, in the 
London Sunday Times, of Mr. Ramsay Mac- 
—164 — 



Problems for the U. S. E. to Solve 


Donald’s article on the minorities as a menace to 
Europe. The sensation caused by the appearance 
of this article, written when Mr. MacDonald was 
an ordinary member of parliament, but pub¬ 
lished after its author had become prime minister 
of Great Britain, to some extent directed atten¬ 
tion away from the things he actually said. 

“When the treaties were ratified,” said Mr. 
MacDonald, “leaving Jews out of account, the 
following figures will give some idea of how they 
left the matter. Out of a population of 27,000,000 
Poland included about 6,000,000 of alien race; 
Czechoslovakia, out of 13,000,000, had 3,250,000 
Germans and 745,000 Magyars; Hungary, out of 
7,000,000, had over 500,000 Germans and nearly 
a quarter of a million others; Rumania was still 
worse, for half of Transylvania was alien, Buko- 
vina was German, Bessarabia was Russian and 
Ruthenian, the Dobruja was a mixture of Bul- 
gars, Russians, Germans, and Turks.” 

After speaking of the way in which the mi¬ 
nority problem has developed Mr. MacDonald 
commented: “No political genius can provide 
frontiers for European states which will follow 
with fidelity racial divisions. The populations 
—165— 



The United States of Europe 


are too much mixed up, and there are islands of 
races which can neither be formed into separate 
states nor be connected politically with their 
parent stock. In the common interests of peace 
and as a defense of democratic institutions, we 
have therefore to consider what are the rights of 
minorities, and what state policy should be pur¬ 
sued regarding them. Obviously the aims should 
be to make the minorities comfortable in the 
state of which they are a part, so that they may 
cooperate in its general life.” 

Mr. MacDonald suggested that the League of 
Nations form a permanent Minorities Commis¬ 
sion, similar to its Mandates Commission, which 
should hear complaints from groups which con¬ 
sidered themselves misused and should provide the 
states thus accused with opportunity for public 
defense of their policies. He admitted, however, 
that the problem was one which required time 
for its solution, and that it would take the dying 
down of the war fever and of the remembrance of 
ancient tyrannies to bring this issue to any settled 
working out. 

In advocating the formation of a League 
Minorities Commission, Mr. MacDonald was ap- 
— 166 — 


Problems for the U. S. E. to Solve 


proving a German proposal. It was Dr. Strese- 
mann who first formally presented this project 
to the Council of the League, and who later 
supported it before the Assembly. Had he lived, 
Germany’s great foreign minister would un¬ 
doubtedly have kept the question under agita¬ 
tion until some agreement had been secured for 
an annual accounting of the methods whereby 
the various European nations were discharging 
their trusts under the provisions for the protection 
of minorities which are incorporated in the 
treaty of Versailles. To what an extent Ger¬ 
many, without Dr. Stresemann’s leadership, can 
carry this project forward it is impossible to fore¬ 
cast. Certainly most of the nations which are 
plagued by the minority problem will resist to 
the utmost any form of League interference in 
their dealing with it. 

It will be at once apparent how directly the 
proposal to form a United States of Europe bears 
on this question. It is bound to be a long time, 
to be sure, before any such union could have 
much political importance. Its first importance 
must be in the economic realm. But its influence 
would, from the start, be thrown against the 
—167 — 



The United States of Europe 


exaggeration of national divisions. Thus it 
would help to modify to some extent the feeling 
of states that they must quickly impress their 
distinctive national characteristics on minority 
groups within their borders. And in the long 
run, as the United States of Europe became a 
political as well as an economic reality, the mi¬ 
nority question would disappear entirely. 

4. Security and Armaments 

A third example of the sort of political prob¬ 
lem that encourages interest in the formation of 
a European federation is that presented by the 
continent’s present burden of armaments. Every 
responsible European statesman deplores the size 
of Europe’s armies, for the taxation burden which 
is involved is one immediate cause of Europe’s 
general poverty. Moreover, army service keeps 
a tremendous aggregate of men from engaging 
in productive work. Common sense, therefore, 
urges immediate and drastic reductions in prac¬ 
tically all of Europe’s military establishments. 
But with the temper of the continent what it is, 
no state—except Denmark—has yet seen its way 
— 168 — 



Problems for the U. S. E. to Solve 


clear to bring such reduction to pass. The lack 
of success which has attended the efforts of the 
Disarmament Commission of the League of 
Nations has become a standing European joke. 

It is worth while looking at the present Euro¬ 
pean military establishment. I have taken the 
figures that follow from the most neutral and 
dependable source available, the Armaments 
Year Book for 1928-29, published by the League 
of Nations. Because of their special relation to a 
proposal for a United States of Europe two of the 
most heavily armed states, Great Britain and 
Russia, are not included in the enumeration. In 
the case of several states it is difficult to distin¬ 
guish between what should be included in this 
enumeration, which is meant to give only the 
present effective forces, and what should be 
placed under the head of reserves. For this 
reason, all such tables will vary slightly. But 
these figures cannot be far wrong. The principal 
point at which they may be questioned is as to the 
number of effectives in the Swiss army. The 
militia system in Switzerland makes it difficult 
to divide between effectives and reserves, but the 
figures given are for men on active duty. 

— 169 — 



The United States of Europe 



Population 

Army Effectives 

Albania 

831,877 

14,009 

Austria 

6,603,588 

20,358 

Belgium 

7.932.077 

65,163 

Bulgaria 

5,596,80° 

32,571 

Czechoslovakia 

14,438,971 

127,012 

Denmark 

3,452,000 

12,000 

Estonia 

I,H 5>094 

! 7*340 

Finland 

3,558,220 

28,083 

France 

40,960,000 

614,378 

Germany 

63,318,753 

99,191 

Greece 

6,197,167 

67,121 

Hungary 

8,522,230 

53,672 

Italy 

40,796,000 

546,709 

Jugo-Slavia 

12,492,000 

1 i 3 , 9 i 6 

Latvia 

1,870,520 

20,450 

Lithuania 

2,286,368 

23,521 

Luxemburg 

271,230 

338 

Netherlands 

7,626,072 

32,126 

Norway 

2,788,893 

15,572 

Poland 

30,212,900 

253,824 

Portugal 

6,080,135 

47,440 

Rumania 

1 7*694,! 89 

i 89,439 

Spain 

22,127,699 

22I,6l8 

Sweden 

6,087,933 

20,931 

Switzerland 

3,980,000 

I56,06l 

Total 

316,840,716 

2,792,843 


When it is realized that, in addition to these 
huge standing armies Europe’s states also main¬ 
tain enormous reserves, the drain of this military 
—170 — 




Problems for the U. S. E. to Solve 


establishment can be understood. It is impos¬ 
sible to tabulate satisfactorily the military ex¬ 
penditures involved, for the basis of the defense 
budget varies so between countries as to make 
comparison impossible. One country will include 
under the head of defense all its pensions; another, 
like Portugal, will place there much of its colonial 
expenditure. The attempt of the commission on 
disarmament of the League of Nations to induce 
member states to adopt a uniform and depend¬ 
able method of reporting military strength and 
expenditures has so far resulted in nothing, al¬ 
though the representatives of leading European 
states were able to agree on a standard form of re¬ 
port. Roughly speaking, however, it is possible to 
say that Europe is spending about $3,000,000,000 
yearly in maintaining its defenses. 

5. Europe’s Burden of Taxation 

The burden of taxation which this involves 
is staggering. On the basis of reports to the 
League of Nations it is possible to tabulate the 
following facts concerning the tax burden borne 
by European states during the fiscal year 1928-29: 

— 171 — 


The United States of Europe 



Receipts from taxes in 

Receipts in 


local currency 

American 

currency 

Austria 

1,142,000,000 krone 

$l6l,022,000 

Belgium 

7,420,500,000 franc 

1,031,449,500 

Bulgaria 

4,116,000,000 lev 

276,352,000 

Czechoslovakia 

8,773,3 00 ,° 00 koruna 

259,689,680 

Denmark 

$342,800,000 krone 

$91,872,400 

Finland 

2,063,900,000 markka 

50,010,280 

France 

38,447,900,000 franc 

I > 5 0 5 > 5 12 , 69 ° 

Germany 

8,862,000,000 mark 

2,018,018,000 

Greece 

6,030,400,000 drachma 

7 8 , 395 > 2 oo 

Hungary 

598,000,000 pengo 

104,052,000 

Italy 

15,484,200,000 lira 

814,468,920 

Jugo-Slavia 

7,109,100,000 dinar 

125,120,160 

Latvia 

117,000,000 lat 

22,581,000 

Netherlands 

540,000,000 gulden 

217,080,000 

Norway 

299,000,000 krone 

79 > 8 33 > 00 ° 

Poland 

2,094,300,000 zloty 

234.561,600 

Portugal 

1,137,000,000 escudo 

50,823,900 

Roumania 

31,267,100,000 leu 

190.729.310 

Spain 

2,746,500,000 peseta 

465.9^.000 

Sweden 

560,300,000 krona 

150,160,400 

Switzerland 

336,000,000 franc 

64,848,000 


The significance of these tax receipts cannot 
be appreciated unless they are compared with 
the population of the nations involved, as shown 
in the preceding table, and with the general 
poverty of the inhabitants of most of these coun- 
—172 — 



Problems for the U. S. E. to Solve 


tries. It is easy to pick out the states in which 
the military establishment is small. 

The economic benefit which would come to 
the continent if this source of expenditure could 
be reduced is incalculable. In the case of Ger¬ 
many, for example, where a large measure of 
enforced disarmament has taken place, it is clear 
that the saving on the defense budget will go a 
long way toward paying the heavy pension and 
reparations charges. For while pre-war Ger¬ 
many had a military budget of approximately 
1,100,000,000 marks, its present budget for mili¬ 
tary purposes is only 500,000,000 marks. And 
while this saving is eaten up in war pensions, 
Germany gains the productive labor of 500,000 
men released from military service, which should 
be no small item on the credit side of the national 
ledger. 

But the other nations, except those that have 
been like Germany forcibly disarmed, see no 
immediate hope of reducing their expenditures 
for military purposes. The divisions and sus¬ 
picions of the continent go too deep to make any 
real disarmament possible under the present sys¬ 
tem. Here again, the coming of a United States 
— 173 — 



The United States of Europe 


of Europe might prove a means of salvation. Not 
immediately, for European tradition would prob¬ 
ably make disarmament the last step in a program 
of federation. But in the long run, any sort of 
union of European states is bound to lessen the 
tension. Out of that, together with an accom¬ 
panying growing realization of a community of 
interest, the way toward disarmament should 
open. 

As long as they remain the divided states of 
Europe, nobody seriously expects the nations of 
the continent to disarm. But as the United 
States of Europe it would be impossible to justify 
a continuing competitive armament. The ulti¬ 
mate solution of this problem, then, is another of 
the political factors that impel European leaders 
to an interest in the movement toward a Euro¬ 
pean federation. 


— 174 — 



CHAPTER IX 


ENGLAND, RUSSIA AND THE U. S. E. 


Wh 


i. Will Britain and Russia Join? 


HEN Count Coudenhove-Kalergi first 
outlined the possible borders of a United States of 
Europe, in his book “Pan-Europe,” published six 
years ago, he left both Great Britain and Russia 
outside. Both, he contended, had become world 
powers in themselves. In the future neither 
would have major interests on the continent. 
Great Britain was being pulled toward other 
parts of the world by her membership in the 
British Commonwealth of Nations, scattered over 
every part of the globe. And Russia was being 
pulled toward Asia by her vast interests there and 
by her rejection of the democratic political sys¬ 
tem of Europe. 

In the event of the formation of a United 
States of Europe, is this likely to be the situation? 
What attitude are England and Russia likely to 
take toward such a movement if it attains for¬ 
midable proportions? It is, of course, impossible 
— 175 — 


The United States of Europe 


to forecast any nation’s action with certainty. 
The actual establishment of a United States of 
Europe seems a considerable distance in the 
future, if it ever comes to pass. By the time of 
its accomplishment, new elements may have en¬ 
tered into the situation which will have a trans¬ 
forming effect on the British and Russian point 
of view. But still it is possible to predict, with a 
fair degree of confidence, what both states will 
do in case membership in a Pan-European feder¬ 
ation is offered them. 

2 . Britain's Industrial Crisis 

There are many reasons why Great Britain 
should be interested in the formation of a United 
States of Europe. Admittedly, her economic 
situation is far from satisfactory. Her trade 
shows no such impressive recovery from the 
effects of the war as that of Germany, France and 
Italy. Conditions in several of her basic indus¬ 
tries are gravely alarming. Her unemployment 
problem has so far defied all efforts at solution. 
Any rearrangement of Europe that would lower 
tariff barriers and open new markets to her prod- 
— 176 — 



England, Russia and the U. S. E. 


ucts would certainly receive British approval. 
But whether that approval would involve Britain 
in actual membership in the European union is 
another question. 

Any contact with the coal situation in Great 
Britain would lead one to believe that her coal 
interests must be eager for participation in some 
new form of international organization. The 
coal production of the United Kingdom averaged 
24 5 337 5 ° 00 metric tons per month in 1913. In 
1928 it averaged only 20,129,000 tons monthly. 
And the worst of this is that, as matters now stand, 
with Germany, France, Poland, the Netherlands, 
and other countries determined to hold the mar¬ 
kets they have gained in the last fifteen years, 
there is no prospect of Britain’s coal trade ever 
being able to dispose of an output much larger 
than that of 1928. This means that an industry 
which is organized to produce at the rate of 
300,000,000 tons a year, or a little more, is con¬ 
stricted to sales of at least 50,000,000 tons less 
than its expected output. 

Out of this situation arises Britain’s terrible 
unemployment problem in the coal fields. Any¬ 
one who has been in South Wales, and seen the 
— 177 — 



The United States of Europe 


hopelessness which has descended on whole sec¬ 
tions of the population there, knows that it in¬ 
volves thousands who are not only unemployed, 
but are rapidly becoming unemployable. I will 
never forget visiting a number of clubs for unem¬ 
ployed unmarried miners which the Quakers are 
conducting in the Rhondda valley. In those 
clubs there were numbers of vigorous young fel¬ 
lows who had been out of school from three to 
six years, yet had never in all that time been able 
to obtain work. It does not take much knowl¬ 
edge of human nature to know that a population 
which has no work for its young men, but con¬ 
demns them to idleness for years after leaving 
school, is drifting rapidly toward moral dissolu¬ 
tion. 

Mr. J. H. Thomas, who has been entrusted 
by his colleagues in the Labor government with 
dealing with this unemployment problem in 
Britain, recognizes this situation. One of the 
most enlightening interpretations of his policy 
was contained in a speech which he delivered 
before the annual convention of the National 
Union of Railwaymen, the union of which Mr. 
Thomas has been the leader for years. “Grave 
-178- 



England, Russia and the U. S. E. 


as the position may be financially,” said Mr. 
Thomas, “to see hundreds of thousands of men 
losing hope, losing the spirit of independence, 
losing the appetite for work, merely looking for a 
short cut to live, is a far graver danger to the 
future of our country.” 

Despite this general recognition of the serious 
nature of the situation in Britain’s coal industry, 
there is as yet no sign of any solving of its prob¬ 
lems. It is admitted that there are at least 250,- 
000 surplus miners, but the process of finding 
them places in other industries goes forward with 
exasperating slowness. It is admitted that many 
mines are so located or so equipped that they 
cannot be worked efficiently, but appeals for 
rationalization make little impression on the 
owners’ individualism. It is admitted that much 
export coal is being sold at a loss, the theory 
being that the home market must make up the 
difference in order to hold the foreign trade, and 
so keep many mines operating. 

In the face of such a situation, one would 
expect the industry to be eager to amalgamate at 
home, to rationalize, and to support the forma¬ 
tion of a European economic federation, inside 
— 179 — 



The United States of Europe 


which it might arrive at some working agree¬ 
ment with the coal interests of Germany and 
other continental countries that would save them 
all from future bankruptcy, and make possible a 
return to a fair degree of prosperity. But no such 
eagerness is manifest. Neither at home nor 
abroad do Britain’s coal interests show any desire 
to surrender their present individual independ¬ 
ence. The one important step made in that 
direction within Britain, the South Wales Coal 
Marketing Association, has broken down. Inter¬ 
est in an international agreement has never been 
strong enough to reach the point of discussion. 

I am aware, of course, that these assertions 
will be challenged in the light of the developments 
which have taken place in the British mining 
industry since September, 1929. At Geneva the 
British delegation to the League Assembly set 
on foot a movement looking toward an interna¬ 
tional conference and convention to control con¬ 
ditions of work and wages in coal mining. This 
is aimed to protect Britain’s export coal trade 
against the necessity of selling at ruinous prices 
in order to compete with the low-wage, long- 
hour miners of certain parts of Europe. At 
—180 — 



England, Russia and the U. S. E. 


almost the same time, a scheme of control has 
been approved by a committee of important coal 
operators in England. If the various district asso¬ 
ciations accept this scheme, it will put the industry 
under an agreement calculated both to regulate 
output and control prices. In other words, Brit¬ 
ain’s coal industry will have begun to rationalize. 

Despite these developments, however, I have 
determined not to change the paragraphs de¬ 
scribing the British coal industry from the form 
in which I originally wrote them. For it needs to 
be pointed out that none of these rationalizing 
plans or moves toward international control are 
the work or wish of the mine operators. They 
have opposed such plans at every step. These 
proposals come now simply because a Labor gov¬ 
ernment is in power—a government which does 
not intend to allow the disorganization in the 
industry to continue longer. It is because the 
government has served notice on the operators 
that unless they rationalize their industry the 
government will nationalize it, in some form, 
that the first signs of a change of attitude in re¬ 
sponsible quarters begin to appear. But if Labor 
should lose office there is no guarantee whatever 
— 181 — 



The United States of Europe 


but that Britain’s coal operators would fall right 
back into their former implacable individualism, 
no matter what ruin might ensue. 

3. Unemployment in England 

The situation regarding British textiles is al¬ 
most as bad as that in the coal industry. During 
the past summer Lancashire witnessed the lock¬ 
out of practically the entire cotton spinning trade. 
Unemployment conditions in the textile towns 
of England are much like those in the coal mining 
regions. Even in iron and steel, where produc¬ 
tion is about back to the pre-war level, the out¬ 
look for the industry as a whole is anything but 
cheerful. 

In an interview last summer Mr. Lloyd- 
George spoke confidently of the unemployment 
scheme which he had advocated in the general 
election as a means of providing work for the 
surplus of unemployed during the next five or 
ten years, at the end of which period Britain’s 
international trade might be expected to be back 
at the pre-war maximum. But as a matter of 
fact, with the rapid development of European 
— 182 — 


England, Russia and the U. S. E. 


competition, and even—as in the case of Japanese 
textiles—of competition in other parts of the 
world, it takes a strong optimism to believe that 
Britain’s pre-war economic position will be com¬ 
pletely restored in another decade. In fact, it 
takes considerable optimism to believe that, in 
comparison with the trade of other nations, it 
will ever be restored. 


4. Why Britain Holds Off 

In April, 1929, the statistics of the United 
Kingdom showed that, out of a total of 11,881,500 
workers, 1,181,375 were receiving unemployment 
benefits. With one worker in ten out of work, 
England would seem to be a fertile field for the 
doctrine of a Pan-European union, inside which 
tariffs should be abolished and materials and 
markets made free of access. But the British 
tradition of world free trade, held as strongly by 
the laboring classes as by any group, rebels 
against any scheme that involves a tariff wall to 
block the entrance of food supplies from any 
part of the world into the British Isles. Even the 
slogan of “Free trade within the empire,” which 
— 183 — 




The United States of Europe 


has been raised by various politicians, fails to 
charm the average British voter. He is in favor 
of free trade within the empire, but he is equally 
in favor of free trade outside the empire. The 
rumor of a threatened “stomach tax, 55 which he 
believes would be involved in any tariffs against 
the importation of foodstuffs from any source 
whatever, is enough to bring about the downfall 
of any government. 

There are, of course, some import duties in 
Great Britain. Free trade is not quite as free as 
once it was. This, too, is to be regarded as a 
result of the war, for it was under the stress of 
that conflict that the “safeguarding duties 55 on 
certain luxury articles were first imposed. These 
were specifically stated to be temporary tariffs, 
and were supposedly imposed in order to dis¬ 
courage the importation of luxuries at a time 
when Britain needed every ton of shipping she 
could command for the transport of food and 
munition necessities. But the safeguarding duties 
have remained in force ever since the end of the 
war. Some of Britain’s industries have prospered 
under their protection. This is particularly true 
of her motor-car manufacturing. Yet it is clear 
— 184 — 


England, Russia and the U. S. E. 


that the English public does not propose to allow 
this concession to the protection principle in the 
matter of luxuries to be extended into a tariff 
system covering general commodities. The sus¬ 
picion that the Conservatives might favor such a 
policy went a long way to drive them from office. 

For this reason, it seems altogether likely that, 
despite the gains which certain British industries 
might find in the entrance of Great Britain into 
a European economic federation, Britain will 
remain outside. She will encourage the forma¬ 
tion of such a federation; she will hope to find 
some basis of close cooperation in case it is formed. 
But she will not join. It was interesting to note 
that, at the session of the League Assembly in 
which M. Briand launched his United States of 
Europe program, while British delegates gave the 
Briand proposal many kind words, it remained 
for one of them, the president of the British Board 
of Trade, Mr. William Graham, to remind the 
Assembly that, after all, that is something a long 
way in the future, and that the most practical 
step to be taken at present is a general agreement 
at least not to raise tariffs any higher for another 
two years. 

— 185 — 



The United States of Europe 


5. Russia and Pan-Europe 

Will Russia enter a United States of Europe? 
No such objections growing out of traditional 
economic policy arise in her case as in that of 
Great Britain. Russia is not a free trade country. 
Many of her present customs duties are the high¬ 
est in Europe, if not in the world. The whole 
idea of bringing together autonomous states in a 
federation for purposes of mutual protection and 
development is congenial to the theory on which 
the Union of Socialist Soviet Republics has been 
based. Moreover, M. Briand has been credited 
in the press with holding that one major benefit 
of the formation of a Pan-European federation 
would be in bringing Russia back into the Euro¬ 
pean circle. But would that come to pass? 

As in the case of England, free trade with 
western Europe would undoubtedly benefit Rus¬ 
sia. The soviet state is working desperately to 
transform Russia into a highly industrialized 
state. The much advertized “five year develop¬ 
ment program, 55 which concentrates attention on 
the expansion of the industrial structure, occupies 
the same place in Russian conversation that pro- 
— 186 — 



England, Russia and the U. S. E. 


hibition has occupied in American. If it could 
be so arranged that Russia could exchange freely 
her surplus cereals for the manufactured articles 
and tools of western Europe, she would find that 
an immense help in gaining the goals which her 
industrial development program has announced. 

Yet, despite these seemingly obvious economic 
advantages, it is hard to believe that Russia would 
come into a Pan-European federation. When M. 
Briand extends the tentative gesture of invitation 
to her, the one fact to which he fails to give suffi¬ 
cient weight is Russia’s attitude of belligerency 
toward all other nations. Yet that is the key 
fact in any understanding of present Russian 
policy. Russia protests her devotion to peace, 
and with considerable justification, for her leaders 
well know that any outbreak of war within the 
next dozen years would probably ruin their pro¬ 
gram. But Russia expects war. She regards war 
as inevitable. Several years ago Lenin warned 
her that the capitalist world would not permit a 
non-capitalist state to grow strong. Russia takes 
the theory of ultimate war with the rest of Europe 
—and with the United States, for that matter— 
as so much holy gospel. 

— 187 — 


The United States of Europe 


6. War Against Europe 

Russia’s industrial program, therefore, is fun¬ 
damentally a means of preparing for this coming 
war. The three large internal loans that have 
been subscribed by her poorly-paid workers have 
owed their success to the promise that they would 
aid in making ready for the coming conflict. 
The main items in the five-year development 
program are items which are of fundamental 
importance in making self-sufficient a nation at 
war. During the past summer, while relations 
with China have been so strained, it has been 
common to hear Russians say, “Of course, we 
don’t want to fight now. But wait until our de¬ 
velopment program has been completed in 1932. 
Then if anybody tries to take advantage of us, 
see what happens!” 

This preparation of Russia for war, under the 
fear of coming attack, deserves much more ex¬ 
tensive treatment than I can give it here. Here 
I can only refer to its existence. But because it 
exists, the present rulers of Russia will certainly 
never go into a federation that might give the 
capitalist states of Europe the slightest measure of 
— 188 — 



England, Russia and the U. S. E. 


influence over their political policy. It is almost 
equally unlikely that they could be induced to 
enter a union that might give these same capi¬ 
talist states any measure of control over their 
economic policy. Russia regards the rest of 
Europe as an enemy. She will not be surprised 
to see the divided states in the rest of Europe 
drawing together. Indeed, she will interpret 
this move as one more step toward the day of 
inevitable conflict. But she will hardly care to 
join forces with the enemy. 

As far back as 1923 Count Coudenhove- 
Kalergi predicted that, if Europe did not unite, 
it would lay itself open to Russian invasion and 
conquest. “History gives Europe the following 
alternative,” he declared, “either to overcome 
all national hostilities and consolidate in a federal 
union, or sooner or later to succumb to a Russian 
conquest. There is- no third possibility.” It is 
hard to believe that the choice is as clear-cut as 
that. Why Russia should be certain to undertake 
a western drive if Europe continues her present 
nationalistic divisions is hard to say. Russia’s 
ambitions and expansions are much more likely 
to push her eastward than toward the west. 

— 189 — 



The United States of Europe 


But it does seem that Count Coudenhove- 
Kalergi’s forecast of the constitution of any Pan- 
European federation is substantially correct. 
Unless the public temper in both states changes 
radically, when the day comes for the drawing of 
the boundaries of any United States of Europe, 
Great Britain on the west and Russia on the east 
will have to be left out. 


CHAPTER X 


OBSTACLES TO BE SURMOUNTED 

i. Europe’s Prevalent Skepticism 

T 

JLO an American, there seem to be no end of 
reasons why the movement to form some sort of 
European federation should succeed. There are 
scores of political reasons why it would prove of 
value. There are even more economic reasons in 
its favor. And many of the most influential 
leaders of the continent have pronounced in its 
favor. Yet it must be admitted that if the ques¬ 
tion is broached, the usual well-informed Euro¬ 
pean will say, “A United States of Europe? Oh, 
a fine thing, undoubtedly. I wish that it might 
come to pass. But ... 55 

Why that prevalent “but”? Why, if there are 
so many reasons in favor of such a project, should 
it be regarded with such general skepticism? 
What makes the same European who applauds 
most heartily M. Briand’s public appeal for unity 
confess in private that he regards the whole notion 
as a dream? Is there any real chance for the for- 
—191 — 


The United States of Europe 


mation of a European federation, or is there not? 
And if not, why not? 

I shall attempt in this chapter to summarize, 
with necessary brevity, some of the conditions 
which serve to make the majority of Europeans 
skeptical as to the outlook for this movement. 
Too many of these the American observer, in his 
enthusiasm for the abstract idea, fails to keep in 
mind. 


2 . A Thousand Tears of History 

One thing that the American forgets too 
easily is Europe’s thousand years of history. But 
this historical background constantly exerts its 
influence, and in a multitude of ways, on present 
Europe practice. For example, in regard to the 
proposal for a European customs union it has a 
negative influence by virtue of the fact that the 
past contains only one instance of a really success¬ 
ful attempt to establish a zollverein. The idea of 
a customs union of some kind has frequently been 
proposed, at least for sections of Europe. But 
only in the case of the German zollverein which 
preceded the establishment of the German em- 

— 192 — 


Obstacles to be Surmounted 


pire can it be said to have been successfully tried. 
Even in that instance, the evidence indicates that 
the customs union was more an expression of the 
desire of the various German states to get to¬ 
gether, and was more a step on the way toward 
the later political union, than anything else. 

The customs union succeeded, in other words, 
because Germans generally desired union of all 
kinds, and were glad to adopt as much union as 
was at that stage possible. It would be an opti¬ 
mist indeed who would declare that the various 
peoples of Europe are today eager for union with 
one another. Historical precedent, therefore, is 
against the United States of Europe project. Of 
course, this does not settle the issue. As I have 
already tried to show, such developments in the 
field of industry as the international cartels and 
the rationalization processes show that an im¬ 
portant part of Europe is ready to break with 
precedent. But precedent does have its continu¬ 
ing influence, just the same. And here it must 
be counted on the negative side. 


193 — 



The United States of Europe 


3. Tasting a New Freedom 

But if Europe’s ancient history must be taken 
into account, its modern history must be even 
more regarded. When considering the prospects 
of the movement for a continental federation, it 
should be remembered that there are seven 
nations that have been on the modern European 
map for only ten years, while there are at least 
that many more who feel that their first chance 
for a real place in the European sun has come to 
them since the close of the war. All these nations 
are intensely nationalistic. Their people have 
endured the status of subjugated minorities for 
generations, and even centuries. Now the long 
dreamed day of liberty has come. Naturally, 
they regard this liberty as something to be 
guarded with extreme jealousy. 

Does it need exposition to show that these 
new nations are not likely to greetJ;he proposal 
for a United States of Europe with any great 
enthusiasm? What, they ask, does M. Briand 
mean by his talk of “federal links”? To be sure, 
he is careful to explain that he is not suggesting 
any loss of sovereignty, and that each nation 
— 194 — 



Obstacles to be Surmounted 


within his proposed federation is to remain com¬ 
pletely autonomous. But is it? Will the effect of 
such a union not be, in actual practice, to put 
the small members under the domination of the 
large? And will not the young states who enter 
it awake in a few years to find that their inde¬ 
pendence is a sham, and that they are really as 
much under external control as when they were 
ruled from Saint Petersburg or Vienna? 

As a matter of fact, there is much reason for 
the misgiving of the small nations. Despite the 
assurances of M. Briand and the other exponents 
of the Pan-European idea, it does not yet appear 
how a federation of the continent is to be brought 
to pass without involving a real loss of sover¬ 
eignty on the part of the constituent states. It is 
all very well to talk about putting a tariff wall 
around the outside edge of Europe, and leaving 
the states within that wall entirely autonomous. 
But can that be done? Who is to say how high 
the wall around the outside is to be? And who 
is to say how the proceeds derived from goods 
coming through that wall are to be divided? 
Certainly the states of Europe cannot answer 
either of these questions without surrendering to 
— 195 — 



The United States of Europe 


some extent their present unrestrained sover¬ 
eignty. And almost as certainly, in actual prac¬ 
tice the answers would be practically dictated by 
the large industrial states, whose business inter¬ 
ests would be most involved. The jealous atti¬ 
tude of Europe’s new nations toward their own 
prerogatives is therefore to be accounted a second 
major obstruction on the road toward a Pan- 
European union. 

4. Maintaining Economic Independence 

The new nations have economic, as well as 
political, reasons for hesitating to enter a United 
States of Europe. With the exception of Poland 
and Czechoslovakia, these nations are not heavily 
industrialized. And even the two states named 
are, when compared with the states of western 
Europe, still largely agricultural. All these 
states, however, have dreams of a future strong 
industrial life of their own. And they do not 
want this future industry to be pouring its profits 
into foreign coffers. France, Germany and Bel¬ 
gium are just as foreign to them as the United 
States of America or Japan. 

— 19 6 — 



Obstacles to be Surmounted 


To be brutally frank about it, there is a gen¬ 
eral tendency in the economically backward 
states of Europe to regard the present agitation as 
a scheme of the big business interests of western 
Europe to absorb the business of the entire conti¬ 
nent. This feeling almost never obtains open 
expression, for the budding business interests of 
the new states have their own reasons for not 
wanting to offend the industrialists of the well- 
developed nations. But it is there, and in private 
conversation it is put forward without any hesi¬ 
tation. 

“If this proposal for an economic union is as 
altruistic as the French and Germans say it is,” 
said a responsible leader to me in Warsaw, “why 
don’t they suggest doing something about the 
total economic problem? They say that they 
want to help Polish business, and to insure Polish 
prosperity. But you will notice that the thing 
they are principally aiming at, the leveling of all 
tariff barriers within the continent, is something 
that is principally designed to help the nations 
with a present large production capacity to find 
new markets. 

“I am quite in favor of the free exchange of 
— 197 — 



The United States of Europe 


exports, 55 this commentator went on. “But that 
is only one part—I should call it a one-quarter 
part—of the total European economic problem. 
We will never settle our economic difficulties 
until, in addition to the free exchange of exports, 
we have free exchange of raw materials, free ex¬ 
change of credits, and free exchange of surplus 
population, by which the surplus of laborers in 
countries with a rising birth-rate can migrate 
freely to countries with a falling birth-rate. That 
is the total economic problem. When the Pan- 
European movement pledges itself to all four of 
those proposals, then I will regard it as some¬ 
thing more than a scheme whereby the industry 
of the old states can grow strong at the expense of 
the industry of the new states. But until then, 
I am not much interested. 55 

This may sound like undeserved suspicion, 
but the fact that it exists must be taken into ac¬ 
count. Moreover, it must be remembered that 
the leaders of Europe’s undeveloped states are 
not tremendously upset about the trade diffi¬ 
culties created by high tariff walls. Their people 
have few economic wants. Such industry as they 
have, although it is developing slowly, seems to 
— 198 — 


Obstacles to be Surmounted 


be keeping pace with the development of the 
market on which it depends. And this same in¬ 
dustry regards the high tariff wall as the only thing 
which keeps the invasion of foreign industry out, 
and so keeps money at home. It is next to use¬ 
less to talk, in these countries, about the undevel¬ 
oped potentialities of their resources and markets. 
That is something that worries the real industrial 
titans of western Europe. As far as the business 
men of the undeveloped states are concerned, 
they are generally content to sit down behind the 
protection of their tariff barriers, collect what 
profits modest home industry affords, and wonder 
why they should let any high-power industrialist 
from Berlin or Brussels or Paris come in and take 
the market away from them. 

5. Italy and Pan-Europe 

So much for the opposition from smaller 
nations. The next fact that must be recognized 
is that at least one of the major nations of Europe 
is against a Pan-European federation from the 
start. I have already pointed out the improba¬ 
bility of either Great Britain or Russia entering 
— 199 — 



The United States of Europe 


any continental union. Enthusiasts for the idea, 
like Count Coudenhove-Kalergi, say that Great 
Britain and Russia are not needed; that a Pan- 
European union can flourish without them. But 
no one will contend that a true United States of 
Europe can be formed without Italy. And there 
is little prospect that Italy, in its present mood, 
would go in. 

Warning needs to be given at this point against 
taking too seriously the complimentary things 
that political leaders are at present saying about 
the United States of Europe idea. Important 
European interests are known to be supporting 
the idea, and no politician would affront those 
interests by casting scorn on their proposal. But 
there will be a tremendous difference between 
what is said in the council room and in the par¬ 
liaments when it comes to the taking of definite 
action, and the pleasant words that now fill the 
air during the first weeks of the idea’s proposal 
by M. Briand. 

It is, therefore, altogether possible that Italians 
will say some complimentary things about the 
United States of Europe during these months of 
preliminary discussion. But it is almost certain 
— 200 — 



Obstacles to be Surmounted 


that, when the time for decision comes, Mussolini 
will hold Italy sternly outside. The underlying 
philosophy of a United States of Europe and that 
of fascist Italy are diametrically opposed. Musso¬ 
lini’s aim is primarily to make Italy a nation that 
stands alone; a nation that dominates its part of 
the world; a nation whose “sacred egoism”—to 
use his phrase—compels all others to treat it with 
the consideration due a unique political entity. 
To expect that such a nation will sink its individ¬ 
uality in a general European federation is to 
expect it to change its entire program and ideal. 
Italy must be accounted as another of the ob¬ 
stacles which the Briand proposal has to surmount. 

6. Where the American Analogy Breaks Down 

But when you have taken the temper of 
fascist Italy into account, you have only begun 
to reckon with the psychology of Europe. It is 
at this point that the analogy between the 27 
states of Europe and the 48 states of America 
breaks down. Over and over, supporters of the 
United States of Europe idea have said, “Why 
don’t the separate states of Europe do just what 
— 201— 



The United States of Europe 


the separate states of America did?” And they 
have pointed to the American federal union as 
something that evolved in the same way that the 
European federal union might come to pass. No 
analogy could be more misleading. 

In the first place, it is not true that 48 separate 
states formed the American union. What hap¬ 
pened was that 13 small and struggling colonies, 
having achieved a precarious liberty, formed a 
union into which they gradually absorbed the 
vast territory of an uninhabited and undeveloped 
continent. Moreover, these 13 colonies were 
inhabited by people with a high standard of 
culture, and with a single dominant language, 
religion and social background. To say that there 
is any likeness between such a situation and devel¬ 
opment as this, and the situation and development 
involved in forming a United States of Europe, is 
fantastic. The only justified comparison that 
can be drawn is in the statement that it has proved 
profitable to the 48 states of the American union 
to have a continental territory to develop with¬ 
out interference by tariff barriers, and it would 
prove profitable to a European union to find 
itself in the same situation. 


— 202 — 



Obstacles to be Surmounted 


There is no use in trying to predict the future 
course of European states without having regard 
to their present condition. And any honest con¬ 
sideration of the present situation in many parts 
of Europe must discover that future possibilities 
of economic or political gain will be given slight 
consideration while hatreds remain as they are 
today. I cannot take the space to write of these 
hatreds in detail. Nor would anything be gained 
by so doing. But a person who believes that a 
Bulgar is ready to join with a Serb, or a Pole 
with a German, or a Magyar with a Czech, or a 
Serb with an Italian, or any one of half a dozen 
other combinations, including that of most Ger¬ 
mans with most Frenchmen, has certainly never 
felt the depths of rancour and hostility that divide 
these peoples. 

In addition to these nationalistic divisions, 
there are others as difficult to surmount. The 
racial division between Latin and Slav, or be¬ 
tween Teuton and Slav, is not to be lightly dis¬ 
missed. Even more does religion divide. No 
war monument in all Europe equals in meaning 
the empty spaces of the great square in Warsaw 
on which stood the Orthodox cathedral that the 
— 203 — 



The United States of Europe 


liberated Poles leveled to the ground. And the 
language barrier is still another difficulty that 
must be overcome. 

If you take into account all these considera¬ 
tions, then add to them the general inertness that 
always makes difficult new developments in the 
field of international relationships, as well as the 
prevalent lack of faith to which reference was 
made at the beginning, it will be seen that the 
prospects for a speedy establishment of a United 
States of Europe are not bright. By this I do not 
mean to suggest that there is no chance of such a 
development coming to pass. Europe is genuinely 
on the move today, and there are strong forces, 
both personal and impersonal, pushing her in 
this direction. But Americans who greet the pro¬ 
posal for a federated Europe as the logical way 
out of the continent’s difficulties should have no 
illusions as to the difficulties involved. They will 
not easily be overcome. 


— 204 — 



CHAPTER XI 


HOW WILL THE UNITED STATES 
OF EUROPE BE FORMED? 

i. Going Ahead Despite Difficulties 

What is the outlook for a United States 
of Europe? Is all the talk concerning it nothing 
more than talk, doomed to futility by the opera¬ 
tion of circumstances over which politicians and 
industrialists have no control? Or will some sort 
of federation of Europe’s divided states come to 
pass? It is impossible to close a study such as 
this without attempting to assess the possibilities 
for the future. 

It has already been made clear that there is a 
general interest throughout Europe in what is 
known as the United States of Europe idea. Im¬ 
portant leaders have announced their support, 
and by so doing have given the proposal im¬ 
mediate political importance. It has also been 
shown that Europe, although it has given evidence 
of surprising vitality in its recovery from the war, 
faces a gloomy economic future if the present 
— 205 — 


The United States of Europe 


division of the continent into small and mutually 
exclusive industrial areas continues. The inter¬ 
national cartels and the progress of the rationali¬ 
zation movement have been referred to as proving 
a European readiness to adopt new methods, 
while the importance of Pan-European federation 
in solving political as well as economic problems 
has been pointed out. On the other hand, the 
enormous difficulties that stand in the way of the 
enterprise have been at least suggested. 

M. Briand’s appeal at the recent session of the 
Assembly of the League of Nations shows that 
an effort will certainly be made to surmount 
these difficulties and to form some sort of Euro¬ 
pean federation. Leaders such as M. Briand, 
Herr Stresemann, M. Hymans, Dr. Benes, and 
others in charge of the foreign policy of European 
states, are too deeply committed now to permit 
any hesitation because of the obstructions in the 
way. They must go forward. The question is 
as to which one of several roads they will take in 
order to reach their goal. 


206 — 



How Will the U. S. E. be Formed? 


2. First Moves Toward a Plan 

Let it be clearly stated at once that all present 
forecasts of the future course of the United States 
of Europe movement are pure speculation. There 
is no formal plan under consideration, either by 
separate states or by the League. A few days 
after his Assembly speech M. Briand gave a 
luncheon to delegates from 27 European coun¬ 
tries, at which he urged upon them their support 
of the movement. It is understood that it was 
agreed at that luncheon that M. Briand, after 
soliciting suggestions from many sources, should 
draw up a definite proposal, outlining a possible 
procedure, which should be circulated in memo¬ 
randum form among all the states of Europe. 
On the basis of their reception of this coming 
memorandum, the states would be able, at next 
year’s session of the League Assembly, to decide 
on a positive line of action. 

There is no way, however, of forecasting what 
the contents of the Briand memorandum will 
be. Indeed, there were delegates at the Assembly 
session who were skeptical enough to doubt 
whether M. Briand himself, when at Geneva, 
— 207 — 



The United States of Europe 


was quite sure what he wanted to have done. 
Such skepticism is hardly deserved, for the French 
premier is not one to announce a general project 
until he has a fairly clear idea as to how that proj¬ 
ect may be realized. But it still is true that no 
inkling of the Briand plan has as yet reached the 
public. Even the League delegates who listened 
to M. Briand’s personal appeal for support were 
left in the dark as to exactly what the proposal 
they were to support was. 

If there is as yet no Briand plan, at least for 
public consideration, European council tables 
are equally clear of other definite proposals. In 
other words, matters are in that formative shape 
where numbers of individuals and organizations 
are demanding the formation of a United States 
of Europe, but no responsible body has as yet 
launched a clear-cut program for the achieve¬ 
ment of that purpose. It is known, however, 
that the committee of the League Assembly which 
deals with economic questions—officially known 
as Committee Number Two—has, as a result of 
M. Briand’s speech to the Assembly, begun in¬ 
formal discussion of the outlook. The course of 
this discussion has, in general, now become pub- 
— 208 — 



How Will the U. S. E. be Formed? 


lie knowledge. Out of this discussion it is pos¬ 
sible to suggest a course that the development of 
the movement may follow. 

Discussion in the League committee has been 
stimulated by the circulation of a memorandum 
on the United States of Europe idea prepared by 
Sir Arthur Salter. Sir Arthur Salter is the per¬ 
manent head of the economic and financial sec¬ 
tion of the League. As such, he has unrivalled 
facilities for knowing both economic conditions 
and points of view in every European country. 
His memorandum has no official status whatever. 
It is not a League document; it was not prepared 
for general distribution. It is simply a survey 
of the problem involved in forming a European 
federation, prepared for Sir Arthur’s own use, 
but shared by him with the members of the 
League committee when they requested a chance 
to study it. It is entirely objective in attitude; 
it does not favor any plan of future action. The 
members of the committee, however, are reported 
to have found the memorandum of great value 
in making the present situation clear, and in 
indicating various possibilities that the future may 
hold. 


— 209 — 



The United States of Europe 


3. Instead of a Zollverein 

It will be remembered that the World Eco¬ 
nomic Conference, which met in Geneva in 
1927, called for a general reduction of European 
tariffs, by unilateral, bilateral or multilateral 
action. It is understood that the Salter memo¬ 
randum, opening with a review of the effects 
of this action, admits that it failed to accomplish 
what was hoped. On the whole, European 
tariffs today are, if anything, higher rather than 
lower than they were two years ago. There has 
followed, therefore, the proposal to do what the 
resolutions of the World Economic Conference 
failed to do by forming a United States of Eu¬ 
rope; a federation to establish complete free trade 
within the limits of Europe. In other words, a 
European zollverein. 

Committee members are understood to agree 
with Sir Arthur Salter in the belief that a Euro¬ 
pean zollverein has, at this time, almost no pros¬ 
pects of success. The history of such unions has 
shown that, unless there were overwhelming 
political motives behind them, driving the mem¬ 
bers toward an extremely close political associa- 
— 210 — 



How Will the U. S. E. be Formed? 


tion, they do not work. But if a zollverein is out 
of the question, is there any method of procedure 
that holds out hope? The discussion has tended 
to consider favorably some such program as the 
following: 

It is understood that, in agitating for a United 
States of Europe, the real thing Europeans seek 
is release from the economic disabilities imposed 
by existing tariffs. Modern industrial prosperity, 
according to the economists, depends on mass pro¬ 
duction: mass production depends on mass mar¬ 
kets; mass markets are impossible in Europe until 
the tariff walls come down. Therefore it is sug¬ 
gested that, following the preliminary agitation 
in the Assembly of the League, and the expected 
circulation of the Briand memorandum, a new 
economic conference of all European governments 
might be called. 

4. A Possible European Conference 

The purpose of this conference has been ex¬ 
pressed as the drawing up of instructions to the 
economic organization of the league, “in view of 
the natural tendency of industry to develop on a 
— 211 — 



The United States of Europe 


basis of large scale production, which requires 
secure and free entry into large markets, and of 
the consequent handicap to smaller economic 
units, to consider the best practical measures for 
the enlargement of these units; and to prepare 
the basis for a general conference to be held at a 
later date for the adoption of such measures.’ 5 
Another suggestion which is said to have come 
before the committee would state the purpose 
of such a conference more bluntly as “to examine 
the special difficulties that arise from the great 
difference in size and importance of existing 
economic units and consider the best practical 
measures for overcoming them.” Whatever the 
phraseology that might be used, the purpose is 
plain. 

A new twist is given to the proposal for such a 
European economic conference by the recom¬ 
mendation, first contained in the Salter memo¬ 
randum, that the preliminary conferences should 
be attended by the responsible political leaders 
of the various European states. Ordinarily, eco¬ 
nomic conferences are left to the industrialists 
and economists, with ministers of finance and 
commerce giving such official flavor to delegations 
— 212 — 



How Will the U. S. E. be Formed? 


as is desired. Progress toward a United States 
of Europe, however, is felt to involve such im¬ 
portant political factors that foreign ministers 
and premiers would participate in the negotia¬ 
tions. 

5. The Birth of a . U. S. E. 

Out of this general European economic con¬ 
ference, when it should finally be held, it would 
be hoped that some sort of general association of 
European states would emerge. In the begin¬ 
ning, this association would perhaps do no more 
than pledge its members not to increase their 
tariffs for a fixed period. It will be remembered 
that the president of the British Board of Trade, 
Mr. William Graham, followed M. Briand’s 
speech at Geneva with an appeal for just such a 
tariff-raising holiday. But this period, during 
which tariffs were pledged to remain stable, would 
be regarded as merely a breathing-space during 
which a positive program of tariff reduction might 
be adopted. 

What form this program would take would, of 
course, depend on the temper of the nations at 
the time they joined the proposed general asso- 
— 213 — 


The United States of Europe 


ciation. The League committee had before it, 
among other proposals, one by which tariffs 
would be divided into three categories—high, 
medium, low—with reduction taking place in 
all three, but a greater and more speedy reduc¬ 
tion in the high than in the medium, and in the 
medium than in the low. Using fixed percent¬ 
age reductions in each category for stated periods, 
the point should finally be reached at which 
European tariffs would be eliminated. It is 
practically certain that, in the actual working 
out, any such plan would have many qualifica¬ 
tions and modifications attached to it. But, as 
it stands, it can be said to represent fairly well 
the way by which European leaders, who admit 
that a full zollverein is out of the question, hope 
to achieve a tariff agreement of some such sort as 
is implied in the “United States of Europe 5 ’ 
slogan. 

6 . Most Favored Nations 

This future program, as I have sketched it, 
looks comparatively simple. The trouble is that 
it achieves this simplicity by leaving out of con¬ 
sideration one tremendous factor. But every 
— 214 — 



How Will the U. S. E. be Formed? 


European knows that this factor will require 
handling in any United States of Europe scheme 
that may be proposed. I refer to the Most- 
Favored-Nation clause. This clause is to be 
found in a majority of existing commercial 
treaties. All the commercial treaties between the 
United States and European countries contain it. 
It is the device, meant to protect international 
commerce against unfair discriminations, whereby 
a state guarantees that it will grant to the state 
with which it concludes the treaty in question, 
the same terms of commerce that it gives to its 
“most favored nation.” In other words, the 
most favored nation clause acts to see that there 
are no favored nations; that all are on a par. 

With any consideration of the problem pre¬ 
sented by the most favored nation clauses of exist¬ 
ing treaties, the gigantic figure of Uncle Sam 
again overshadows the European landscape. For 
when the European states wish to abolish the 
tariffs which divide them into impossible in¬ 
dustrial areas, they are confronted by the fact 
that they are bound, by most favored nation 
clauses, to accord the same treatment to Uncle 
Sam. 


— 215 — 



The United States of Europe 


Can Americans look at the dilemma this 
creates through European eyes? Here, on the 
one hand, is the colossal industry of America, 
grown mighty by its possession of a continental 
market within which there are no tariff handi¬ 
caps. This industrial giant has set up high tariff 
walls to keep out the goods of the rest of the world, 
and is now apparently bent on building those 
walls still higher. Moreover, so great is his 
strength that, at the first sign of opportunity, he 
is ready to reach out and absorb the rest of the 
world’s markets. 

Then here, on the other hand, is war-torn, 
shaken Europe, with its economic future threat¬ 
ened by the division of its continent into small 
and competitive economic areas. Europe needs 
desperately to take down the walls that divide 
these areas off from one another. If she can se¬ 
cure a united and free continental market she, 
too, can develop her industry to the point where 
her people will be assured of prosperity. But, the 
minute she takes down these walls to help her own 
development, the most favored nation clause 
throws open the whole territory to the American 
giant. Striding out from behind his own high 
— 216 — 



How Will the U. S. E. be Formed? 


walls, this giant will seize the European market 
before Europe herself has a chance to develop it. 

Looking at the situation in this light, the 
European asks himself what he is to do with the 
most favored nation clauses. Naturally, a con¬ 
siderable portion of European opinion now favors 
abolishing them altogether. But a course so 
drastic would be sure to stir up international ill 
will. Moreover, it would require a long time 
to carry it into effect, waiting for various existing 
treaties to have their renewal dates fall due. 
What other possibility is there? The proposal is 
being increasingly made that Europe might deal 
with the problem of America’s most favored na¬ 
tion clauses by “interpreting” or announcing 
“reservations” to the present understanding of 
those clauses. Both words have a familiar sound. 

What is meant is that the economic commis¬ 
sion of the League has already decided, in connec¬ 
tion with another question, that a reservation to a 
commercial treaty can be justified “in the case of 
plurilateral conventions of a general character 
and aiming at the improvement of economic re¬ 
lations between peoples.” Here surely, says the 
European, is a situation that fits this condition. 
— 217 — 



The United States of Europe 


Then let the European states, in their proposed 
association, announce a general reservation to 
their existing commercial treaties, whereby the 
benefits of the tariff reduction within Europe 
would extend only to the members of the associa¬ 
tion. 

7. How Would America Respond? 

Immediately the question arises, How would 
the United States take such an act on the part of 
the European states? The answer would seem to 
depend largely on the sporting attitude of Ameri¬ 
can industry. A procession of American indus¬ 
trialists has been calling on Europe to do away 
with her tariffs. But are they willing to have 
Europe do this in such a way as not to make her 
markets an open prey to American invasion? As 
matters stand, with America holding her own 
high tariff and at the same time ready to profit 
under the most favored nation clauses, America 
can regard the whole situation in Europe as a 
“Heads I win; tails you lose 55 affair. But if 
America were willing to let Europe go ahead and 
create an economic unit enclosing a market with 
a consuming capacity about equal to her own, in 
— 218 — 


How Will the U. S. E. be Formed? 


order that the two large units might then face, 
and compete, and cooperate with each other on 
something like equal terms, the formation of a 
United States of Europe would be immensely 
simplified. 

It will not do, in the face of the difficulties 
within Europe and the difficulties created by 
America’s commercial position under the most 
favored nation clauses, to talk too optimistically 
of the prospects for a United States of Europe. 
One is bound to respect the courage of the 
European leaders who have espoused this cause. 
The odds are against their success, and no public ^ 
man wants to be identified with failure. But 
they are men of ingenuity and power, and I am 
inclined to believe that, eventually, they will 
bring some sort of European federation to pass. 

The United States of Europe will come much 
more slowly than current propaganda might lead 
the casual reader to expect. But it will come 
eventually because of the pressure of the world 
economic situation. There is still too much vi¬ 
tality, too much pride in Europe to allow that 
continent to be content to watch the establish¬ 
ment of an American industrial hegemony. Some 
— 219 — 



The United States of Europe 


way will be found to bring Europe’s divided parts 
together. This union will start as an economic 
federation—a matter of tariffs and imports and 
exports. But as soon as the economic federation 
is established, it will find itself so involved in the 
solution of political questions that there is no 
forecasting what closer political affiliations may 
finally come to pass. 


— 220 



CHAPTER XII 


IN CONCLUSION 

In presenting this treatment of the United 
States of Europe movement to the American 
public I have sought only to act the part of a 
reporter. That, great journalist, Rudyard Kip¬ 
ling, long ago wrote that a reporter’s duty is con¬ 
tained in answering the questions asked by his 
“six trusty serving-men”—what? where? when? 
why? how? who? This book is simply an attempt 
to answer those six questions as they confront the 
proposal to form a federation of the states of 
Europe. It does not attempt to pass judgment 
on the wisdom or importance of the movement. 
It tells whence the movement has come, and why, 
and whither it seems to be traveling. With that, 
the book must be content. 

Yet I am sure that the reader who has been 
interested enough to read through the material 
presented in reporting the fact of the movement, 
must also have formed some impression of its 
importance. I do not see how the observer of 
— 221 — 


The United States of Europe 


world affairs, however hurried, can overlook this 
importance. In these pages it must have be¬ 
come clear that the formation of a United States 
of Europe is bound to have far-reaching effects on 
Europe’s economic future. That will be the first 
effect, if the plans of M. Briand and those who 
work beside him toward this end are carried to 
fruition. The industrial life of every nation in 
Europe will expand under the stimulus of access 
to new materials and new markets. And this 
expansion will bring its benefits to the cottage 
of every factory worker, every farmer, every la¬ 
borer. 

But the creation of a Pan-European federation 
will inevitably have more than economic effects. 
It will ultimately and profoundly change the 
political life of the entire continent. Today the 
states of Europe view each other with suspicion, 
maintain huge armies to “protect” themselves 
against one another, conduct their affairs as 
though their neighbors must be regarded as po¬ 
tential, if not active, enemies. A federation that 
unites the economic life of these peoples will 
certainly destroy this provocative and dismal 
political outlook. Give Europe a generation— 
— 222 — 



In Conclusion 


perhaps only a decade—of economic unity and 
you will be in clear sight of political unity. 

And that is peace. There is peace, of a kind, 
in Europe today. Nations have guaranteed each 
other’s boundaries. Nations have pledged them¬ 
selves against resort to war. Nations have signed 
commitments to arbitration. All these things are 
to the good. They are pushing a divided Europe 
farther and farther toward peace. But there is 
still lacking, behind all treaties, and underneath 
all formal pledges, that emotion of general trust 
and of a community of interest which must form, 
in the last analysis, the unshakable basis of peace. 

To some degree, even that emotion is begin¬ 
ning to be felt. The sessions of the councils, the 
assemblies, and the commissions of the League of 
Nations are contributing to its appearance. 
These give the leaders of Europe a chance to meet 
together, to work together, to approach the solu¬ 
tion of common problems together. But before 
the emotion can permeate European life there 
must be a meeting of Europe’s masses. It must 
be a genuine meeting—not for a day or a month, 
but a continuous meeting, in which men look at 
each other as fellow-workers toward one goal. 

— 223 — 



The United States of Europe 


That meeting a United States of Europe can, 
if it is formed, bring to pass. Because it can bring 
it to pass, the fortunes of this proposal should be 
of deep concern to every human being who hopes 
for the establishment of a permanently peaceful 
world order. 

Writing in the Christian Science Monitor 
Count Coudenhove-Kalergi has expressed the 
opinion that the formation of Pan-Europe will 
be but the first step toward a wider unity. After 
Pan-Europe he envisages a federation that shall 
include Pan-America and the British common¬ 
wealth in a Pan-Atlantis. And after that a still 
wider confederation that shall include the Japa¬ 
nese in a union including all the world. 

It is natural that this prophet of the Pan- 
European Union, encouraged by the reception 
which his idea has received during the summer 
of 1929, should now lift his eyes to a wider vision. 
There is much in his new prophecy to merit 
thoughtful consideration. But let that work out 
as it may. It is not a question for the immediate 
future. 

Today it is enough to consider only the future 
of a divided, suspicious, and still antagonistic 
— 224 — 


In Conclusion 


Europe. Is there any way out of the morass in 
which the states of Europe find themselves caught? 
Is there any way for the people of Europe to 
secure a standard of life commensurate with that 
of the people of the New World? Is there any way 
for Europe to secure her peace? 

Here is a way. Despite all the difficulties, 
here is a way so wise, so plain, that it is incredible 
that Europe, when once its peoples realize all that 
is at stake, can turn aside from it. It is on that, 
that one can rest a faith in the ultimate realiza¬ 
tion of what so many now call a dream—the for¬ 
mation of a United States of Europe. 


— 225 — 





















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